CDF Law and Public Finance: Kenya's 2015 Court Test

A government programme can be popular, deliver visible projects and still be unconstitutional in the way it is designed. The 2015 High Court decision in Institute of Social Accountability v National Assembly made that point with unusual clarity. The case concerned the Constituencies Development Fund Act 2013, but its wider importance lies in the questions it asked about money and institutional responsibility: who may plan a project, who may spend, who may oversee, which level of government owns the function, and what should a court do when striking down the law immediately would disrupt ongoing public services.

This article focuses on the High Court stage because it adds two practical dimensions that can be lost when attention moves only to the later Supreme Court ruling. First, the High Court examined public participation in a contextual way and did not invalidate the law merely because Parliament moved quickly. Secondly, after finding the Act unconstitutional on structural grounds, it suspended the declaration of invalidity for twelve months. The case is therefore as much about constitutional remedies and legislative process as it is about CDF itself.

The challenge to the 2013 CDF Act

The Institute of Social Accountability and the Centre for Enhancing Democracy and Good Governance challenged the Constituencies Development Fund Act 2013. The Act organised development spending around constituencies and created a national CDF Board, constituency structures and roles connected with Members of the National Assembly.

The petitioners argued that the scheme interfered with the new system of devolution, distorted constitutional revenue-sharing, mixed legislative and executive functions and had been enacted without the Senate’s required involvement. They also challenged public participation surrounding the 2013 amendment.

A three-judge High Court bench consisting of Justices Isaac Lenaola, Mumbi Ngugi and David Majanja declared the Act unconstitutional. The Court considered the defects too deeply embedded in the statutory scheme to be cured by simply severing a few sections.

The public-participation holding is often misunderstood

The Court did not accept every procedural attack on the legislation. It recognised that Article 118 requires Parliament to facilitate public participation and that public involvement is a substantive constitutional value, not ceremonial formality. But it also examined the legislative history as a whole.

Although the amendment moved through Parliament quickly, the Court found that the subject had been considered through an earlier CDF review task force and related stakeholder processes. It concluded that a reasonable degree of public participation had occurred and that the amendment remained within the parameters of matters already in the public domain.

That part of the judgment remains useful because it rejects two opposite errors. Parliament cannot avoid participation simply by calling a measure technical. But a court should not assume that every amendment introduced during the legislative process requires an entirely new nationwide consultation. The real inquiry is whether the public had a reasonable opportunity to know, understand and influence the substance ultimately enacted.

Why the Act nevertheless failed

The constitutional defects were structural. Kenya’s 2010 Constitution recognises national and county governments, distributes functions through the Fourth Schedule and creates rules for sharing nationally raised revenue between the two levels.

The High Court considered the CDF design inconsistent with that architecture. A constituency is an electoral unit of representation, not a third level of government. Where constituency structures plan or implement projects in areas constitutionally assigned to counties, responsibility becomes blurred and parallel delivery systems can emerge.

The Court also objected to the involvement of legislators in the implementation architecture. Members of the National Assembly legislate, appropriate and oversee. When the same political office becomes involved in selecting or administering projects that it later oversees, the line between legislative scrutiny and executive implementation weakens.

The Senate issue reflected the same structural concern. Because the amendment affected matters with a real impact on counties, the Court held that Senate involvement could not be avoided merely through a formal label placed on the Bill.

Public finance is about accountability, not only arithmetic

The case is valuable because it treats public finance as an institutional system rather than a question of where money happens to be spent. Articles 201 to 203 of the Constitution require openness, accountability, equitable development and an ordered system for sharing revenue.

A fund may finance useful schools, roads or community facilities and still create constitutional problems if its financial route obscures which government is responsible, duplicates planning or removes money from the revenue-sharing structure in an impermissible way.

The IMF Fiscal Transparency Code provides a useful non-binding international comparison. It treats clarity, comprehensiveness and accountability in public finance as central to sound fiscal management. The Code does not determine whether Kenya’s CDF legislation is constitutional. That is a Kenyan constitutional question. Its relevance is that international fiscal-governance standards similarly recognise that transparent public money requires clear institutional responsibility and traceable reporting.

Why the Court suspended invalidity

After declaring the 2013 Act unconstitutional, the High Court did not order the fund to stop immediately. It suspended the declaration of invalidity for twelve months. That remedy acknowledged an uncomfortable reality: ongoing projects, contracts and public expectations had developed around a system the Court had found unconstitutional.

Immediate nullification could have created administrative disorder and harmed beneficiaries who were not responsible for the constitutional defects. The temporary suspension gave the political branches an opportunity to redesign the framework while preserving constitutional supremacy.

This was not permission to keep an unconstitutional statute indefinitely. A suspended declaration is exceptional precisely because the Constitution remains superior. The remedy manages the transition from an invalid scheme to a lawful one. It should therefore be time-limited, justified by concrete public-interest consequences and designed to place responsibility for correction on the institution with power to legislate.

The later appellate history changes how the case is cited

The 2015 High Court decision was not the final appellate word. The Court of Appeal later took a narrower view. In 2022, however, the Supreme Court in Institute for Social Accountability & another v National Assembly & 5 others [2022] KESC 39 (KLR) restored the central conclusion that the CDF Act 2013 was unconstitutional.

That history means the High Court decision should not be presented today as if it stands alone. Its detailed reasoning on participation and suspended invalidity remains persuasive and useful, but the binding constitutional rules governing the 2013 Act now come from the Supreme Court.

It is equally important not to treat the 2015 judgment as a decision on the separate National Government Constituencies Development Fund Act 2015. That later statute has generated its own litigation and must be assessed on its own provisions and later appellate decisions.

The practical lesson for courts and legislators

For legislative drafters, the case suggests a constitutional-design audit before creating a development fund. Each proposed function should be mapped to the Fourth Schedule. The route by which money enters the fund should be compared with the constitutional revenue framework. Oversight should be separated from implementation. If a Bill affects counties in substance, the correct bicameral procedure should be considered at the beginning rather than defended after enactment.

For litigants, the pleading should separate procedural and structural complaints. Public participation should be proved through the record of notice, drafts, consultation and material changes. A devolution complaint should identify the particular county function said to be displaced. A separation-of-powers claim should explain what operational power is being exercised by a legislative actor. A public-finance claim should trace how money moves and why that route conflicts with the Constitution.

For courts, the remedy deserves as much attention as the declaration. Where a statute is deeply unconstitutional but immediate invalidation would produce serious disorder, a carefully limited suspension may protect the public while requiring lawful replacement.

Why the 2015 case still matters

The 2015 CDF case remains worth reading because it shows constitutional review operating at three levels at once: how a law was made, how a public programme was institutionally designed, and how an invalid law should be unwound.

Its most useful lesson is not that constituency development is undesirable. The Court repeatedly confronted the fact that the programme had real public support and ongoing projects. The constitutional question was whether valuable development objectives were being pursued through institutions and financial channels authorised by the 2010 Constitution.

That distinction remains relevant whenever government creates a special fund, task force, authority or delivery vehicle. Good intentions can explain why a programme exists. They do not answer who has lawful power to perform the function, control the money and account for the result.

Source note

This article is based on Institute of Social Accountability & another v National Assembly & 4 others [2015] KEHC 6975 (KLR), the Constitution of Kenya 2010, the later Court of Appeal and Supreme Court history culminating in [2022] KESC 39 (KLR), and the IMF Fiscal Transparency Code as a non-binding international comparison on transparent and accountable public finance.

Suggested citation: 

Ronald Serwanga, “C CDF Law and Public Finance: Kenya's 2015 Court Test” East Africa Legal Insight (7 September 2026).