Newly constructed classrooms at Enchurai Primary School in Kilgoris funded by the National Government Constituency Development Fund /KNA
You may have read that MPs are trying to save the Constituency Development Fund—putting up a “spirited” or a “vibrant” fight, according to the media.
WHAT IS THE CDF?
The current Act of Parliament says that one purpose is to “recognise the constituency as a platform for identification, performance and implementation of national government functions.”
At least 2.5 per cent of the national government’s share of national revenue is allocated to a fund from which a national board allocates money each year to each of the 290 constituencies.
The money is to be used only for projects within the national government’s “exclusive jurisdiction” (meaning not things that counties can do).
There are certain limits on the type of projects (an interesting one is that climate change mitigation activities like tree planting can be included provided that not more than five per cent of a constituency’s allocation may be used for this).
Up to 40 per cent may be allocated to social security programmes, education bursary schemes, and other education projects.
A committee set up in every constituency must hold meetings to discuss development issues. Ideas for projects may come from the public and from the committee. Projects must be approved by the national board.
A committee of the National Assembly oversees the scheme. Over the years, there has been a sort of battle of legal wits between Parliament and the courts (or those who go to court).
The central issues have been whether the CDF impinges on the scheme of devolution in various ways and whether it is appropriate for MPs and Parliament to be involved in the administration of the scheme.
After the first court defeat in 2013, the original CDF Act was replaced by the National Government CDF Act—restricted, in theory, to functions of the national government.
Over the years the role of MPs has been whittled away, and in 2023 the only remaining function of MPs—to appoint an oversight committee for the fund in their constituency—was removed from the Act.
Last September, the High Court declared the NG-CDF Act unconstitutional and said all activities under it must be wound up by mid-2026.
THE NEW CASE: MPS’ ROLE
The Supreme Court in the case on the first version of the CDF said, “Members of legislative bodies, …ought not to be involved in the implementation of any service-based mandates which are a preserve of the Executive Branch.
This is the only way to respect the constitutional scheme on separation of powers and ensure that the Legislators’ oversight mandate is not compromised through conflict of interest.”
In the new case, this issue was less central. However, the court focused on a provision saying that a fund account manager seconded by the board to the constituency would hold that office only until the next general election or by-election.
The court said that “this implies that the Member of the National Assembly remains in the shadows of the Fund, controlling its operations, however remotely, at the constituency level.”
So although Parliament seems to have tried to cleanse the Act of all mention of MPs, they left this telltale provision. Justice Thande said in the recent case that "......the role of the Member of the National Assembly must remain that of representation, legislating, and oversight as per Article 95 of the Constitution.”
The situation is odd, to say the least. MPs want the CDF because they get credit for it. But they have no role. So either they are getting credit for things they have not done, or they are doing things they have no legal power to do.
THE NEW CASE: DEVOLUTION
The High Court, like the Supreme Court in the earlier case, held that there is some fuzziness (my word) in the allocation of functions to the CDF—the language used, including about community projects, sometimes seems to embrace county government functions.
This confusion undermines devolution. It also violates the principles of public finance under the constitution, risking duplication and waste of expenditure and making clear financial reporting difficult.
Constituencies are for representation. The very fact of using the constituency as a government body for delivery of services is inconsistent with the structure of devolution. It is creating a third level of government in addition to the national and county.
WHAT NEXT?
The case has been appealed to the Court of Appeal. If that court agrees with the High Court, Parliament could deal with many of the points in the High Court judgment by more careful drafting of the legislation.
The basic objection to the use of the constituency as a service delivery unit would be harder to deal with. And taking this funding approach from constituencies is exactly what the MPs would not want.
WHAT HAPPENED TO LOCAL GOVERNMENT?
Before 2010, there were 175 local authorities: 67 county councils (which dealt with rural areas), 43 municipal councils, 62 town councils, and three city councils.
These largely elected bodies carried out local decision-making and administration of national government legislation (though the government (there was only one) interfered a lot with local government).
The South African constitution did set up three levels of government: national, provincial, and the elected local governments, called municipalities.
These administer certain things listed in the constitution and may have other responsibilities under either provincial or national legislation. Our constitution does not include this sort of body.
Now we have counties and within them urban areas (including cities), villages, wards (the electoral districts for counties), and other units—as county governments may decide.
They include subcounties that are “equivalent to the constituencies.".And “the functions and provision of services of each county government shall be decentralised” to these agencies (County Governments Acts. 48 ).
The national government is also supposed to decentralise its functions as much as ppossible,but how is not spelled out.
This can be done through the equivalent of the old provincial government (now the National Government Coordination Officers—county commissioners, chiefs and so on).
Secondly, it
could be through the local offices or
agencies of national departments or
agencies, as the High Court pointed
out.
Thirdly, the Urban Areas and Cities Act says that the board of a city or municipality will “on behalf of the county government" deliver services mentioned in that Act or in other “national or county legislation.”
National functions can be assigned by law to counties (Article 186), but it is unclear whether the constitution envisages that national legislation deciding which county agency should exercise them. And should they be exercised “on behalf of the county” as the Urban Areas Act says?
A later Act could include services for people living in rural areas or as well as the larger units. There must be public participation under the constitution and the Urban Areas Act is very detailed on this. However, none of these local agencies within counties has democratically elected management.
You might say that the constitutional setup is less democratic than before 2010. Fourthly, the High Court suggested that national functions could be dealt with by conditional grants.
Apart from the “equitable share” national government may give grants to counties. These are usually conditional – enabling the national government to agree with counties that money must be spent in a certain way.
Conditional grants seem to be given for county functions (health, agriculture, building county headquarters for example). If the idea were to use them for national functions, there would have to be law under Article 186 or a formal process of agreement between county and national government under Article 187.
It would make it easier to coordinate local projects within national and county government functions. Of course MPs would not be happy.
The CDF was created to make MPs happy.Then tasks were found to justify the money
