Introduction

2

Asset Management in Transition under Kenya’s Devolution

INTRODUCTION

All countries transforming intergovernmental systems follow bumpy roads as they design and implement decentralization or devolution by amalgamating a large number of entities into a small number of new units. Whether developing, transitioning, or developed, all countries face numerous technical, legal, institutional, and political challenges.

Assets play a distinctive role in institutional reforms because they represent a bulky stock that remains in place, and most parts are literally immovable regardless of the direction or nature of the institutional changes. The government of Kenya recognized this way before the Kenya devolution program, and the Ministry of Finance (MoF) released a circular (MoF 2000) that outlined the procedure of public asset management (AM). The circular instructs accounting officers to establish government AM registries and committees in their respective ministries, departments, or local governments. Failure to comply with this circular for over a decade created one major impediment to the devolution and transition of assets to the new county governments.

Another peculiarity is that the assets are the material base of the local public services that need to be delivered uninterrupted during and regardless of the immense institutional or political changes. Thus, the assets should be kept operating regardless of institutional, legal, or financial uncertainties during transitions. The Transition to Devolved Government (TDG) Act clearly states these objectives: “The object and purpose of this Act is to provide a legal and institutional framework for a coordinated transition to the devolved system of government while ensuring continued delivery of services to citizens” (TDG Act 2012, preamble).

Finally, assets often are associated with environmental, social, or financial liabilities that should not be detached from assets and thus cannot be ignored; on the contrary, financial liabilities need close control and management during transition because they are growing unstoppably, some at high speed.