Kenya’s county governments are confronting a severe financial strain as unpaid bills to suppliers and contractors soar to Sh177.47 billion.
The latest County Governments Budget Implementation Review Report, covering the first quarter of the 2025-26 financial year up to September 30, 2025, reveals that clearing these debts could take over two years even if counties suspended all other spending, including salaries and development projects.
County executives are responsible for Sh171.92 billion of the total arrears, while county assemblies owe Sh5.55 billion. Almost half of the total debt, Sh85.15 billion, has been pending for more than three years, leaving many local businesses at risk.
Bills less than a year old total Sh46.83 billion, those between one and two years stand at Sh24.12 billion, and debts aged two to three years amount to Sh19.62 billion.
The Controller of Budget highlighted that many counties have not followed their payment schedules, violating regulations that require trade payables to be prioritised.
Regulation 55(2)(b) of the Public Finance Management (County Governments) Regulations, 2015, stipulates that all eligible pending bills must be treated as a first charge in county budgets, including for the 2025-26 financial year.
Nairobi City County is the most affected, with pending bills of Sh82.89 billion, exceeding its annual budget of Sh44.62 billion. Even if the county stopped all expenditures, it would take more than two years to clear the arrears.
Senator Samson Cherargei said the crisis is driven by a mix of political and administrative failures, including patronage, corruption, and cancelled payments for unrelated reasons.
“There is an urgent need for the Senate, the Controller of Budget and the Auditor General to sit down and interrogate this issue comprehensively because it is getting out of hand,” he said, stressing that contractors and traders are being pushed to the limit.
Other counties also face high debt-to-budget ratios. Kilifi would need 50 per cent of its Sh19.87 billion budget to settle Sh6.9 billion in bills, while Machakos would spend 38 per cent of its Sh15.19 billion budget on Sh5.8 billion in arrears.
Busia and Narok would dedicate about 32 per cent of their budgets, while Bungoma, Kiambu, Wajir, and Taita Taveta would allocate 27 per cent. Trans Nzoia, Tana River, Kisumu, and Kajiado would use between 20 and 26 per cent of their budgets to clear pending bills.
On the other hand, Elgeyo Marakwet has no outstanding debt. Makueni would need only three per cent of its budget to clear Sh401.54 million, while West Pokot, Turkana, Nyeri, and Kitui would need four per cent each. Baringo and Kisii would require five per cent, Samburu six per cent, Nyamira and Marsabit eight per cent, Meru eight per cent, and Migori nine per cent.
The Controller of Budget urged county governments to prioritise trade payables as a first charge in their budgets and to stick to the payment plans submitted for the 2025-26 financial year. She warned that neglecting these obligations will continue to weaken service delivery and erode confidence in the devolved system.
