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The East African : Mar 9th 2015
The EastAfrican 48 BUSINESS MARCH 7-13,2015 Ai≥tel invests in upg≥ade of Kenya netwo≥k By SCOLA KAMAU Special Correspondent BHARTI AIRTEL has invested Ksh2.5 billion ($27.4 million) to upgrade its network in Kenya to enhance indoor coverage and 3G quality as it prepares to set up a 4G network. Airtel officials said its indoor coverage in major Kenyan cities had been affected by increased urbanisation and its current spectrum on 1800Mhz. New, tall buildings across ma- The National Treasury building in Nairobi, Kenya. The government will this month launch a system that will increase accountability on the way tax money is spent. Picture: File Kenya’s ≥eal-time financial t≥acking system should cu≥b mismanagement L ast week, the Integrated Financial Management Information System department of Kenya’s National Treasury said it would in the course of March launch a system that will give Cabinet and Principal Secretaries a real-time view of how all ministries and state agencies spend their budgetary allocations. This is part of the government’s efforts to streamline public finance management, which started with Integrated Financial Management Information System (IFMIS) re-engineering in 2011. The IFMIS Business Intelli- gence Dashboard is expected to put a stop to the numerous instances where monies set aside for development projects end up being used for recurrent budgets. The system will monitor how all ministries, departments and agencies spend funds on a real-time basis in a bid to improve budget implementation. This is a laudable move as it will mean that government officials will exercise more caution in how they spend public funds. And if not, the Cabinet Secretaries should be able to arrest the situation before it gets out of hand, given that they will be in the loop the entire time. Impact A major impact will be the control of diversion of develop- COMMENTARY PENINA NYAWIRA The system will monitor how all ministries, departments and agencies spend funds on a real-time basis.” ment funds to cater for what have in the past been said to be more pressing needs. Such diversions have slowed down development projects and to a major extent, Kenya’s economic growth. Given that road, water, pow- er, telecommunications and other essential infrastructure play a vital supportive role in the growth of other economic sectors, when we do not spend enough on such areas, the end result is that our economy will always post marginal growth rates. This is not to underplay the importance of recurrent expenditure considering that the same state officials are the ones that oversee the execution of development projects, but the constant “borrowing” from the development budget to meet “more pressing needs” will see us running an economy without a development budget, risking stagnation or even worse, negative growth. In the course of any given financial year, the country’s spending is usually heavily weighted toward recurrent spending, which takes up more than it is allocated. Sometimes the recurrent expenditure surpasses the legal threshold of 70 per cent of the budget, where state officials will take monies set aside for development to fund recurrent expenses. As per the Public Finance Management Act (2012), a minimum of 30 per cent of the country’s annual budget must be set aside for development purposes. In several instances, Treasury has exceeded this target, setting aside in some instances over 40 per cent of the country’s budget for development purposes. The IFMIS Business Intelli- gence Dashboard will bring an end to the era of diverting development funds to recurrent budgets as Cabinet and Principal Secretaries will be able to monitor spending by ministries, departments and agencies in real time. The IFMIS Business Intelli- Cabinet, Principal Secretaries will be able to monitor spending by ministries, departments and agencies in real-time.” Ms Nyawira gence Dashboard will give access to a real time summary of the expenditure and enable measuring of budget performance against work plans. The Dashboard is designed to give graphical representation of allocated budgets and expenditure levels at a single log in. Monitoring The Cabinet Secretaries and their Principal Secretaries will through the dashboard know which state agencies under their ministries do not have adequate absorption capacity. They will know this immediately instead of at the end of the financial year when they are obligated to return the money to Treasury. They will also know which agencies are holding on to huge amounts of money throughout the fiscal year and only spending it towards the end of the financial year, making unnecessary expenditure in a bid to exhaust their allotted funds. The IFMIS Business Intel- ligence Dashboard, which will significantly improve public funds management in Kenya, will also be cascaded to the counties, enabling Governors to see how officials from their respective counties are spending county funds. Already, the National Treas- ury has rolled out IFMIS to all ministries, departments and agencies, and the 47 counties, and they are are at an advanced stage of using the system. Treasury is in the process of rolling out IFMIS to state corporations, beginning with the 19 corporations under the National Treasury on a pilot basis. Managing budgets and ex- penditures through IFMIS has helped increase transparency and enhanced easy reporting in national and county governments. The PFM Act (2012) requires all public institutions to carry out their transactions through a system prescribed by the National Treasury, which in this case is IFMIS. Penina Nyawira is a communications consultant specialising in public finance management Airtel Kenya CEO Adil El Youssefi and Ebru Africa’s Zippy Wanjiru. Airtel is upgrading its network. Picture: Diana Ngila jor cities are blocking base stations requiring operators to shift the stations and deploy stronger spectrums that allow transmission of voice, messages and data. “We are going to launch 3G (UMTS) services in 900Mhz spectrum in major cities and make the network 4G LTE ready,” said Airtel Kenya in a statement. The second largest mobile operator by subscriber numbers has upgraded all sites in Mombasa and Kitale, and Nairobi is in progress. With the growing demand for data services, alongside the increasing proliferation of smartphones, the 900Mhz spectrum upgrade project significantly enhances indoor coverage penetration and improves data quality for 3G network users. The announcement comes as the Communications Authority seeks to increase penalties for poor quality services by mobile operators to either 0.1 per cent or 0.2 per cent of their gross revenue from a flat rate of Ksh500,000 ($5,494). A shift by Airtel to 900Mhz from the 1800Mhz band means that signals will travel a longer distance — the higher the frequency band, the lesser the distance and the poorer the quality. The 900Mhz band has 30 per cent to 40 per cent better coverage than the 1800Mhz band. Airtel’s 4G rollout in Kenya will be its third; Airtel Africa launched 4G in Seychelles and Rwanda in November last year. In 2014, Safaricom became the first mobile telecommunication company in Kenya to launch the 4G service in Kenya and is currently carrying out a pilot project.
Mar 1st 2015
Mar 16th 2015