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How to Read and Interpret a County Fiscal Strategy Paper (CFSP)

The County Fiscal Strategy Paper is the guide to the county budget process. It looks at how the past and the present setting of the budget process can inform the future.

The County Fiscal Strategy Paper should specify the broad strategic priorities and policy goals that will guide the county government in preparing its budget for the coming financial year and over the medium term (3-5 years).

Every County Treasury should prepare and submit the County Fiscal Strategy Paper to the County Executive Committee for approval. The County Treasury shall then submit the approved Fiscal Strategy Paper to the County Assembly by 28th February of each year.

The County Treasury must publish and publicize the County Fiscal Strategy Paper within seven days after it has been submitted to the County Assembly.

For the purpose of understanding the CFSP, we shall use the Draft County Fiscal Strategy Paper 2019 for Nairobi County (180 downloads) .

Key components of a County Fiscal Strategy Paper

Four crucial things must appear in every County Fiscal Strategy Paper. These are performance, priorities, projections, and sector ceilings.


The performance section provides up-to-date information on the county government expenditure and revenue collection. It helps to determine whether the decisions made going forward on revenue collection and expenditure are realistic.

The performance is usually sector based. For example, how much is the county spending on health in relation to agriculture? Or else, how much revenue has the county been able to raise? One should be able to pinpoint this information from the County Fiscal Strategy Paper.

County governments should base their up-to-date budget performance on the previous financial year and the recent budget implementation reports. The recent budget reports are usually the half-year performance reports produced during the 2nd quarter of the current financial year (July to December).

In the Draft CFSP 2018 for Nairobi County, the performance information is provided in pages 14-24.


The second key aspect of the County Fiscal Strategy Paper is projections. The projections should indicate the overall revenue and expenditure expected for the next (or coming) budget year. They should also indicate any deficit expected in the budget.

The County Fiscal Strategy Paper should indicate how much revenue the county government expects to raise from the central government and from its own local revenue sources. It should also indicate the expected revenue from donor funding, grants, and internal or external borrowing in the next budget year.

For expenditure, the projections should show things like recurrent expenditure, capital or development expenditure, debt repayment, among others.

The figures provided when coming up with the projected revenue and expenditure should be reasonable. This is because some counties design ambitious budgets that they are unable to keep up with. Others provide figures that lead to rundown budget levels.

The information on performance serves as the baseline for projecting revenue and expenditure in the next financial year.

The projections in the Nairobi Draft CFSP 2019 are in Annex I on page 80.


Priorities deal with identifying what to fund or the distribution of needs across sectors. This involves identifying priority spending areas.

This section identifies key priorities and the areas to receive less funding so that the priorities can receive more. This should also reflect in the figures provided in the sector ceilings (see below on ceilings).

Priorities explain the choices made in the next financial year for the various sectors. For example, why is the county government prioritizing agriculture over early childhood development? From there, you should be able to match priority sectors to the figures in the sector ceilings. The narrative in the priorities should correlate to the figures in the ceilings.


The sector ceilings represent the budget limits. They determine the amount of money allocated to each sector and how the money is distributed across these sectors.

The ceilings should show the amount of money the counties will spend in meeting the identified priorities. This section involves identifying the numbers, the sector allocations, that are the core of every County Fiscal Strategy Paper.

You should be able to identify the areas getting the highest and the lowest allocations from this section.

As noted earlier, the ceilings should correlate with the priority spending areas. The figures provided in the budget ceilings should match with the narrative under priorities. For example, if a county says that it will prioritize health (in the priority section), then the budget allocation (or ceilings) should be increasing as compared to the previous financial year or even relative across sectors.

The Sector Ceilings in the Nairobi Draft CFSP 2019 are in Annex II on page 81.

In practice, the performance, projections, and ceilings should be provided in table format. That is because they represent the figures. The priorities should be in a narrative form since they explain the choices made in the sector ceilings.

Public participation

Does the County Fiscal Strategy Paper recognize public input? To prove this, there should be a list of factors affecting the final allocations. This is referred to as the risk section.

It is also worthy to reiterate that the County Fiscal Strategy Paper estimates expenditure and revenue for the coming financial year and the subsequent two years. For example, the County Fiscal Strategy Paper 2019 for your county should contain estimates (projections) for the fiscal year 2019/20, 2020/21 and 2021/22.

When drafting the County Fiscal Strategy Paper, counties should align it with its national equivalent, the National Budget Policy Statement (BPS). See this guide by IBP Kenya on how to read and analyse the BPS.

The period leading to the formulation of the County Fiscal Strategy Paper allows the public to bargain on what they consider most important to them in any financial year. It is a haggling and negotiation process.

(Information courtesy of a training workshop on CFSP organized by IBP Kenya)

Written by George Githinji

Githinji is passionate about devolved governance, public finance and cycling. He comments on topical socio-political issues in Kenya. In addition, he manages the @UgatuziKenya platform.

Follow Me → @Epic_Kenyan

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