Counties across Kenya are facing severe operational strain as the national government delays over Sh68 billion in transfers, jeopardizing salary payments, contractor settlements, and essential services.
The delay has forced some counties to seek expensive bank loans just to keep basic operations running, while others are confronting stalled development projects and mounting bills.
The shortfall includes Sh33.2 billion owed for December and Sh35.27 billion for January, following a late November allocation released only last month.
Nyeri Governor Mutahi Kahiga described the strain on his county: “We even struggled to afford fuel in December and were unable to pay suppliers.” He warned that a looming strike by clinical officers, alongside the Kenya County Government Workers Union, could worsen the crisis.
“Right now, we face a looming strike by clinical officers, who have issued a strike notice, alongside the Kenya County Government Workers Union. The delay will only worsen the situation,” he added.
Governor Kahiga stressed that residents are the hardest hit, noting that delays mean hospitals cannot buy essential drugs or medical supplies.
Makueni Governor Mutula Kilonzo Junior said his county has been forced to borrow from banks to cover deficits, risking penalties if loans are not repaid.
“Even development projects have stalled because contractors cannot proceed when their raised certificates are not honoured,” he explained. “Contractors are becoming wary of county projects, incurring bank penalties when payments are delayed. This affects overall budget absorption and delivery of services,” he added.
In Kirinyaga, Governor Anne Waiguru said the November allocation helped clear outstanding salaries and urgent recurrent bills, including payments to Kenya Power.
“Of course, we are affected by the delay. Bursaries, school payments, and other development works have been stalled. We are hopeful the December exchequer will be released by the end of this week,” she said.
Similarly, Nyandarua Governor Kiarie Badilisha told the Senate County Public Investments and Special Funds Committee that delayed transfers are preventing counties from effectively running operations.
Homa Bay Finance CEC Solomon Obiero said the county, led by Governor Gladys Wanga, has relied on own-source revenue to pay staff salaries while development initiatives remain on hold.
“We managed to pay December salaries, but development initiatives have taken a backseat. We are expecting the national government to release funds this week or next,” he said.
Governor Wanga confirmed that no allocations have been received this year, raising concerns about financial stability.
“To maintain essential services, we have had to rely on borrowing to pay salaries and meet immediate obligations. Once funds are released, we repay the loans,” she said. She warned that unpaid bills to suppliers and contractors could slow down projects and damage relations.
Nairobi Governor Johnson Sakaja said his county faces similar pressures despite receiving the December allocation. He highlighted that most of Nairobi’s monthly funds—Sh1.7 billion—go toward salaries, leaving only Sh200 million for the county assembly. “Nairobi, for instance, is a unique county because the bulk of the funds we receive monthly—some Sh1.7 billion—go toward salaries, amounting to Sh1.5 billion, while the remaining Sh200 million is transferred to the county assembly,” he explained.
Treasury officials in Murang’a reported receiving the November allocation in early January but are yet to receive December funds.
“This means we are still waiting for the December allocation, and January is almost over. We might have to secure overdrafts to pay December salaries, which will come at a cost because banks charge interest for the facility,” an official said.
The financial pinch is severe at the coast, particularly in Taita Taveta and Tana River counties, where civil servants are entering their second month of delayed pay.
“We have not received funds; we are struggling. People have bills to pay, school fees to clear, and basic needs to meet,” said a senior official from Taita Taveta.
In Tana River, funds sent by the Treasury have yet to reflect in county accounts. “We cannot confirm anything. For now, our accounts remain dry,” a senior official said. Lamu County Finance Executive Mohamed Mbwana, however, reported no delays, attributing any slow spending to the mandatory e-GP system.
The Senate County Public Accounts Committee, currently on retreat in Mombasa, has warned governors against prioritizing new projects or luxury spending over settling debts.
Committee Chairperson Senator Moses Kajwang’ said: “Governors must stop treating pending bills as an afterthought. The Senate Finance Committee has been seized of the matter, and we made a resolution last year, initiated by Senator Ledama Ole Kina, providing a framework on how counties should settle pending bills.”
President William Ruto had pledged to address delays in fund releases, but governors and senators accuse the National Treasury of starving counties of cash, forcing reliance on costly loans.
Article 203(1)(j) of the Constitution requires county revenue to be stable and predictable, while Article 209 mandates timely transfers. Section 17(6) of the Public Finance Management Act further obligates the Treasury to disburse funds by the 15th of every month.
National Treasury Cabinet Secretary John Mbadi insisted there is no crisis, noting that only two months have experienced delays. “Some counties have already received December allocations, and all 47 will have their funds by the end of the week,” he said, pointing out that counties like Lamu still have unspent funds.
“The government does not have a liquidity problem unless one seeks to create one. Have you heard counties complain that they lack funds to run their operations? We have worked diligently to ensure that delays in disbursements are a thing of the past,” he added.
Experts and officials warn that such delays are not new but a recurring issue since devolution began. Past disruptions, including in September and July last year, forced thousands of county employees to go without salaries for months, disrupting service delivery and development projects.
Controller of Budget Margaret Nyakang’o has recommended strict adherence to disbursement schedules and urged Parliament to fast-track the County Governments Allocation Act to ensure timely transfers.
The CoB’s report for the first quarter of the current financial year indicates that counties had Sh107.27 billion available, with Sh66.13 billion from the equitable share of national revenue, Sh26.32 billion in carryover balances, and Sh13.94 billion from own revenue.
During this period, counties spent Sh55.15 billion, mostly on recurrent expenditure, with only 7 percent allocated to development projects.
