Nairobi City Hall is set to expand its partnership with Sidian Bank to introduce a new digital platform aimed at improving how the city collects taxes and manages funds. This move follows the county’s earlier decision to move its main banking operations to Sidian Bank, bringing the lender closer to the centre of Nairobi’s financial operations.
The proposed collaboration will cover not only tax collection but also the management of the Facility Improvement Fund for county hospitals and donor contributions. Documents presented to the county assembly’s budget committee reveal that the partnership will involve fee-free ledger accounts that are integrated with mobile payment solutions.
“The budget committee has noted that the County government is desirous of partnering with Sidian Bank for the provision of revenue collection and revenue management systems, and the management of Facility Improvement Fund (FIF) by providing a ledger fee-free account integrated with mobile payment provisions,” the report states.
City Hall plans to open dedicated project accounts with Sidian Bank to receive donor funds. These accounts are designed to operate without ledger charges, a measure officials say will help reduce operational costs.
The memorandum of understanding between the county and the bank outlines a plan to build a unified digital system that will manage revenue streams including parking fees, business permits, and land rates. The bank is expected to provide the technological infrastructure and payment mechanisms to improve efficiency, reduce revenue leakages, and enable real-time reporting.
“The County plans to partner with the bank in providing revenue collection and repayment, eliminating cash handling by revenue officers, enabling real-time data collection, and managing the Facility Improvement Fund,” the assembly report notes.
The new system will heavily rely on digital and mobile payment options, minimizing manual processes that have previously caused delays and revenue losses. Additionally, the bank will extend services such as cash-backed car and mortgage loans for eligible County Executive Committee members and credit facilities for county staff and government operations.
While the partnership’s scope is clear, the report does not specify how much Sidian Bank will charge for these services. Previous providers, including JamboPay, which handled the city’s revenue collection from 2014 to 2019, charged a commission of roughly 4.5 per cent, which in one year led to more than Sh500 million being deducted from county collections. That contract was later terminated over disputes about compliance and system performance.
The absence of fee details in the proposed arrangement may spark renewed concerns over transparency and the costs of outsourcing revenue collection. Currently, the county collects taxes through the Nairobi Revenue Service, a system developed by the Kenya Revenue Authority.