Counties are struggling to implement development projects as the new electronic government procurement system stalls progress, according to a fresh report by the Parliamentary Budget Office (PBO).
The report shows that the rollout of the e-GP platform is disrupting procurement processes, slowing budget execution, and affecting service delivery in the early months of the 2025-26 financial year.
The PBO notes that slow adoption of the system has become a major obstacle in implementing county budgets during the first three months of the year. Delays in acquiring goods, services, and executing key development projects have led to postponed initiatives and slowed the delivery of essential services.
“These delays could slow overall budget execution stemming from stalled procurement, contributing to the accumulation of pending bills,” the report warns.
Governors have raised alarms, describing the e-GP system as flawed and ineffective. They argue that its hurried rollout, limited testing, and inadequate training for procurement officers have made it difficult to issue contracts or obtain necessary goods and services.
By September 30 last year, counties had not settled Sh51.79 billion owed to contractors for completed projects, and the PBO cautions that this figure could rise if delays continue, straining county-supplier relations and worsening the backlog of pending bills.
“Full transition to the e-GP platform has encountered implementation challenges including system downtime, limited user capacity and protracted approval workflows,” the report adds.
“These constraints have slowed procurement cycles for key programmes, potentially delaying the initiation and completion of critical public investment projects and weakening the overall fiscal multiplier.”
The report follows a recent Controller of Budget statement citing 20 counties for recording no development spending between July and September 2025.
The remaining 27 counties spent only Sh3.69 billion, reflecting a mere two per cent absorption of the Sh218.99 billion annual development budget.
Analysts link the low absorption rates to the strict requirement that all procurement must now be conducted through the e-GP system, highlighting the system’s central role in slowing county development.
