Nairobi County's debt obligations continued to mount during the first nine months of the 2025/26 financial year, with the County Assembly increasing its borrowing while the County Executive maintained billion-shilling overdraft facilities to finance operations, according to the latest budget implementation report by Controller of Budget Margaret Nyakang'o.
According to the COB, the Nairobi County Assembly started the 2025/26 financial year with an outstanding short-term loan balance of Sh.243.75 million from Family Bank. During the reporting period, the Assembly borrowed an additional Sh.140.07 million to support its operations and repaid Sh.13.5 million, leaving an outstanding balance of Sh.370.27 million as of March 31, 2026.
The points that, the assembly also operated an overdraft facility with Co-operative Bank of Kenya to finance personnel emoluments averaging Sh.35.28 million per month. By the end of the reporting period, the overdraft balance remained at Sh.35.28 million.
The Controller of Budget's report further reveals that the County Executive continued relying on short-term borrowing to meet payroll obligations maintaining an overdraft facility with Sidian Bank averaging Sh.1.6 billion per month for personnel emoluments, with an outstanding balance of Sh.1.54 billion by March 31, 2026. The County also owed Sh.214.51 million through an overdraft facility with Co-operative Bank.
‘’The County Executive has a bank overdraft facility with Sidian Bank of Kenya Limited to cover its personnel emoluments, which averaged Sh 1.6 billion per month. By 31 March 2026, it had an overdraft balance of Sh.1.54 billion. The County also has an outstanding Co-operative Bank Kenya overdraft facility of Sh.214.51 million.’’ Nyakang’o reports.
In addition to the overdrafts, the County still carries a long-standing Sh.4.5 billion loan from Kenya Commercial Bank secured in 2010 under the defunct Nairobi City Council, which remains classified under trade payables.
The report shows that during the review period, the Controller of Budget approved exchequer withdrawals amounting to Sh.23.70 billion from the Nairobi County Revenue Fund. Of the approved funds, Sh.1.52 billion, representing six per cent, was allocated to development programmes, while Sh.22.18 billion, equivalent to 94 percent, went towards recurrent expenditure.
Despite the approvals, no withdrawals were made from the Nairobi City County Assembly Fund because the fund had not yet been operationalised. As of March 31, 2026, the County Government's cash balance in the County Revenue Fund stood at Sh.771.69 million.
The report further indicates that Nairobi County spent Sh.32.12 billion on development and recurrent programmes during the reporting period, representing 136 percent of the total funds released by the Controller of Budget. The expenditure comprised Sh.5.34 billion on development projects and Sh.26.78 billion on recurrent expenditure.
‘’During the reporting period, the Controller of Budget did not approve exchequer withdrawal requests from the Nairobi City County Assembly Fund (CAF) account because the fund had not yet been operationalised. As of 31st March 2026, the County Government’s cash balance in the CRF account was Sh.771.69 million. ‘’ Nyakang’o reports.
While development expenditure accounted for only 40 percent of the annual development budget, recurrent expenditure had already reached 86 percent of the annual recurrent allocation, underscoring the continued dominance of operational spending over development projects.
Employee compensation remained one of the County's largest expenditure items. The report shows that Nairobi County spent Sh.14.16 billion on salaries and related personnel costs, representing 51 percent of the County's total revenue. This marked a 10 percent increase from the Sh.12.84 billion recorded during the corresponding period in the 2024/25 financial year.
The Controller of Budget attributes the increase in employee compensation to the adoption of accrual accounting in financial reporting. Of the total wage bill, Sh.6.28 billion, accounting for 44 percent, was spent on employees in the health sector.
Further analysis indicates that personnel costs amounting to Sh.13.85 billion were processed through the Human Resource Information System (HRIS), while Sh.311.95 million, representing two per cent of the wage bill, was processed manually. According to the report, the manual payroll covered community health workers, casual employees, staff not yet on boarded onto HRIS, top-up allowances for security officers, and LAPTRUST and LAPFUND pension contributions.
The report also sheds light on expenditure by the County Assembly, noting that it spent Sh.30.29 million on committee sitting allowances for its 124 Members of County Assembly and the Speaker against an annual budget allocation of Sh.70 million. The average monthly sitting allowance stood at Sh.26,927 per MCA, with the Assembly operating 26 House Committees during the period.