Devolved units face two-year paralysis as pending bills soar

Some county governments may be forced to suspend nearly all operations for more than two years to clear pending bills.

The operations include salary payments and development projects.

A report by the Commission on Revenue Allocation (CRA), submitted to Parliament, shows that at least 17 counties have accumulated pending bills amounting to more than 20 per cent of their annual revenues. The debts are pushing devolved units to the brink of financial paralysis.

 According to the CRA, the ballooning bills have subjected suppliers and contractors to prolonged financial distress, with many unable to sustain their businesses due to delayed payments.

 “The accumulation of pending bills by county governments has a negative effect on suppliers of goods and services. County governments should therefore prioritise the payment of pending bills,” the commission says in the report.

 Nairobi county is the most indebted, with pending bills totalling Sh86.8 billion, equivalent to 249.5 per cent of its annual revenue. This means the county would have to suspend all activities for more than two years if it channelled all its income towards clearing the debts.

 Nairobi’s pending bills are the highest among the 47 counties, accounting for nearly half (49.9 per cent) of the total owed by all devolved units.

 Overall, the 47 county governments cumulatively owed suppliers and contractors Sh176.9 billion as of June 30, 2025. Of this amount, Sh171.7 billion (97.1 per cent) was owed by county executives, while county assemblies accounted for Sh5.2 billion (2.9 per cent).

 The report further shows that Kilifi and Machakos counties would need to spend more than half of their annual revenues to clear pending bills. Kilifi owes Sh9.3 billion, equivalent to 55.9 per cent of its revenue, while Machakos owes Sh6.7 billion, or 54.4 per cent of its income.

 Kiambu county has accumulated pending bills of Sh7.9 billion, representing 42.2 per cent of its revenue. Busia follows with pending bills equivalent to 38.3 per cent of its income, while Tana River and Wajir stand at 31.5 per cent and 31.2 per cent, respectively.

 Other counties whose pending bills exceed 20 per cent of annual revenues include Taita Taveta (29.5 per cent), Bungoma (27.5 per cent), Kajiado (27.1 per cent) and Laikipia (26 per cent). Garissa (26.3 per cent), Embu (25.8 per cent), Kericho (25.6 per cent), Mombasa (25.4 per cent), Siaya (23 per cent), Murang’a (21.5 per cent) and Nyandarua (21.2 per cent) are also in the high-risk category.

 Only three counties — Narok, Elgeyo Marakwet and Lamu — reported pending bills amounting to less than one per cent of their annual revenues, highlighting sharp disparities in fiscal discipline.

 As of June 2025, recurrent expenditure pending bills accounted for 71.7 per cent (Sh126.9 billion) of the total, while development-related pending bills made up 28.3 per cent (Sh50 million).

 Nairobi again topped the list of recurrent pending bills at Sh79.6 billion, followed by Kiambu (Sh4.5 billion), Machakos (Sh4.03 billion), Kilifi (Sh3.88 billion), Nakuru (Sh3 billion) and Mombasa (Sh2.55 billion). Narok reported no recurrent pending bills during the period under review.

 The CRA attributes the surge in pending bills to weak own-source revenue collection and the failure by counties to prioritise the settlement of existing obligations before committing to new spending.

 The commission warns that unless urgent corrective measures are taken, the growing debt burden will continue to choke service delivery, cripple local economies and erode public confidence in devolution.