Legal Alert: Public Finance Management (COVID-19 Emergency Response Fund) Regulations, 2020

Introduction

The COVID-19 pandemic calls for extraordinary measures for governments around the world. It is an inevitable preparation for battle. As of today, over 2 million people have been affected globally with up to 127,000 deaths being recorded. In Kenya, the total number of infections stands at 225, 10 having succumbed as a result. African countries have not largely experienced the full extent of the global explosion of the virus; this has presented a window of opportunity for planning an effective response of containment and mitigation.

The National Treasury of Kenya has put in place expedient measures to establish the Emergency Response Fund Regulations to enable the Government to cater for the expenditure arising from the COVID-19 pandemic.

Considerable coordination, between the National and County governments, is being undertaken, to mitigate the effects of the virus. Further, different stakeholders including the Ministries of Health, Treasury, Interior & Coordination of National Government, Transport, ICT & Innovation and Youth Affairs, among others, have formed programs for coordination. The National Treasury of Kenya has put in place expedient measures to establish the Emergency Response Fund Regulations to enable the Government to cater for the expenditure arising from the COVID-19 pandemic. This is owed to an unanticipated increase in health care expenditure on tests, treatment including medication and equipment, and other measures to support the population. 

COVID-19 Emergency Response Fund

The National Assembly delegated the duty to establish national public funds to the Cabinet Secretary responsible for finance with the approval of the National Assembly. Towards this end, the Public Finance Management (COVID-19 Emergency Response Fund) Regulations, 2020 establishes the COVID-19 Emergency Response Fund (“the Fund”) under Section 24 of the Public Finance Management Act (“the Act”). 

To achieve this purpose, the Regulations in particular establish and specify the sources, object and purpose of the Fund, provides for management by a Board and an administrator, affords and provides for the expenditure of the Fund. The objects and purpose of the Fund shall include to

  • mobilize resources for emergency response towards containing the spread and impact of the pandemic; 

  • fund the purchase of essential supplies for public hospitals and other related institutions, as need arises; 

  • fund programmes and initiatives towards cushioning and provision of emergency relief to the most vulnerable in urban informal settlements; 

  • to support and stimulate micro, small and medium enterprises rendered vulnerable by the pandemic; 

  • to fund restoration of the facilities being used for compulsory quarantine for safe use by the hosting institutions; 

  • to enhance the capacity of the relevant research institutions in handling COVID-19 surveillance; and 

  • to fund any other emerging issue arising from the COVID-19 pandemic.

The Fund shall consist of monies appropriated by the National Assembly for purposes of the Fund; voluntary contributions from public officers and private persons; grants, donations, subscriptions, bequests or other gifts made to the Fund; and monies from any other source approved by the Cabinet Secretary. The National Treasury is to monitor the application of the COVID-19 Emergency Response Fund resources as per regulation 14. 

Institutions including the Office of the Director of Public Prosecutions (ODPP) and the Ethics and Anti-Corruption Commission (EACC) have already donated Kshs 2 billion recovered from graft cases to the National Treasury as part of efforts to beef up the Covid-19 Emergency Fund.

The Covid-19 Emergency Response Fund Board is now in place and has urged the public, corporates and multinational institutions to send their donations. Institutions including the Office of the Director of Public Prosecutions (ODPP) and the Ethics and Anti-Corruption Commission (EACC) have already donated Kshs 2 billion recovered from graft cases to the National Treasury as part of efforts to beef up the Covid-19 Emergency Fund. The sourcing of funds comes at a time when the World Bank Group Board of Directors approved fifty ($50) Million dollars in immediate funding to support Kenya’s response to the global pandemic under a new operation known as the Kenya Covid-19 Emergency Response Project. 

The winding up of the fund commences when a Presidential Declaration that COVID -19 is no longer a threat to socio-economic and political stability of Kenya is made, which triggers the process of winding up the Fund. 

Conclusion 

Preceding health calamities including SARS and Ebola showed that modification of these checks and balances would be important but should not be omitted. Fraud and corruption pose an improbable resultant to poor public financial management amid the crisis. Therefore, it would be important to utilize the entrenched constitutional principles, as checks and balances to avoid such tragedies. 

This is to say that accountability and transparency being the backbone of democracy, need not be disregarded and overlooked at such crucial times. Whenever possible, pre-existing framework contracts may be used. Posting all procurement information related to COVID-19 on government portals will enhance transparency and trust. After all, uncertainty breeds chaos. 

 

This analysis was put together by the Financial Services team led by Partner Dan Kagagi

and can be reached at dkagagi@tripleoklaw.com.

 

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