SPEECH BY HENRY ROTICH THE CABINET SECRETARY TO THE NATIONAL TREASURY ON THE OCCASION OF SIGNING PERFORMANCE CONTRACTS WITH

THE CHAIRMEN OF THE CONTRACTING STATE CORPORATIONS UNDER THE NATIONAL TREASURY AT THE TREASURY CONFERENCE ROOM, 14 TH FLOOR, ON NOVEMBER 15TH, 2013, AT 2.30PM. 1 Chairmen, Directors, and Chief Executive Officers of the State Corporations under the National Treasury; The Principal Secretary/National Secretary; Ladies and Gentlemen; It gives me great pleasure to host you at the National Treasury this afternoon on the occasion of signing performance contracts for State Corporations under the National Treasury for the 2013/14 Performance Contract Year, this being the 10th cycle of the Public Sector Performance Contracts since inception. It is also a momentous occasion as it is the first generation of performance contracts under the Jubilee Government. Ladies and Gentlemen, for faster and sustainable economic development, a stable, reliable, sound, and effective financial system is critical. In this regard, we are called upon as the financial sector players to provide effective financial intermediation to support and facilitate other sectors of the economy undertake their operations. Indeed no economy can grow without the lubricating power and efficient financial sector. To ensure a well functioning sector, there is need for effective regulation and supervision which promotes orderly growth, development, and assures the smooth functioning of financial institutions, financial markets and financial infrastructure in a healthy competitive environment. Achieving and sustaining macro-economic and financial stability is the foundation for sustainable, broad-based economic growth and employment creation, vital for realizing the countrys development agenda as outlined in the Vision 2030. It is therefore important for those of you in the regulatory space to identify and take measures to mitigate potential vulnerabilities and downside risks. You should continuously monitor and evaluate performance, soundness and stability of regulated institutions in order to isolate and address system wide risks. Ladies and Gentlemen, the Government of Kenya has institutionalized performance contracting as a tool for improving public service delivery starting from the highest level with the aim of cascading the same to all levels of Government. You will recall that His Excellency the President signed performance contracts with all Cabinet Secretaries at a ceremony held at Kenyatta International Conference Center on 2nd October 2013. I am happy to have the opportunity today to cascade relevant components of my PC to you Chairmen of the State Corporations under the National Treasury. I expect you to cascade the same to your CEOs who will ensure that they are cascaded down to their direct reports and so on down the chain. I will be holding you to account on these targets and will report back to HE the President and the Deputy President accordingly. Ladies and Gentlemen, as leaders we should strive to promulgate policies; adopt best practices; and put in place systems and structures that will make our State Corporations well managed and

positioned to contribute positively to the economy. Time for wasteful and loss-making corporations is gone. We must justify our existence to the tax payers. You should be effective facilitators and catalysts of our economic growth. As people in positions of responsibility Kenyans are looking up to you to ensure that you conduct the affairs of your corporations in a transparent, responsible, effective, and efficient manner. Kenyans expect to get a good return for their investments in the parastatal sector both in terms of financial or economic return and in the delivery of quality service to all stakeholders. 6 Ladies and Gentlemen, under the Public Finance Management Act, there are a number of reporting requirements with strict time lines which you are expected to adhere to. To this end, you are required to ensure full understanding of and compliance with the law. Furthermore, you are required, from time to time, to submit information that is necessary for the National Treasury to carry out its oversight role and requisite reporting to the National Assembly and other Agencies. In this respect you should ensure that all required information is submitted to the National Treasury, and indeed any other relevant Government Agencies on a timely manner. For Performance Contracting to be effective, we need to ensure that the system of rewards and sanctions is clear and is transparently implemented across the board. The National Treasury is in the process of developing an appropriate policy for rewards and sanctions under the Performance Contracting Framework. In this regard, we intend to issue guidelines for rewards and sanctions in the course of this financial year. Ladies and Gentlemen, I take this opportunity to thank all of you for the dedication you have shown in running your organizations. In particular I thank you for the role you have played in developing the strategic plans for your organizations and for making sure that these plans are translated to specific work plans and action points that are specific, measurable, achievable, realistic, and time-bound. I also commend you for ensuring that your strategic plans are aligned to both Vision 2030 and the Jubilee Manifesto. Ladies and Gentlemen, I am informed that the process leading to todays event of signing the performance contracts has been exhaustive in the sense that it has been consultative, interactive, and thorough. Noting that the contracts were freely negotiated, I do not expect any State Corporation to fail to meet its targets outlined in the performance contract. I therefore look forward to all of you achieving an excellent score.

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Ladies and Gentlemen with these few remarks, it is now my pleasure to sign the contracts with yourselves.

I thank you all.