Governors during the Biennial Devolution Conference at Eldoret Sports Club in Uasin Gishu County on August 17, 2023.
Governors have warned that counties risk paralysis as the national government delays the release of more than Sh68 billion in the equitable share of revenue.
The devolved units are struggling to pay staff salaries, remit statutory deductions, and settle contractors and suppliers, leaving numerous bills pending. Some counties have resorted to costly bank loans to stay afloat, with Nyeri even running out of fuel last December.
The crisis comes as county governments face a looming strike by the Kenya County Government Workers Union.
The counties are owed Sh33.2 billion for December and a further Sh35.27 billion for January. The last allocation, for November, was disbursed late last month.
Nyeri Governor Mutahi Kahiga.
Nyeri Governor Mutahi Kahiga said his administration has struggled to provide essential services due to the delayed transfers.
“We even struggled to afford fuel in December and were unable to pay suppliers,” he said.
“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,” Governor Kahiga added.
He warned that the greatest victims of delayed disbursements are wananchi, noting: “When funds are delayed, hospitals cannot even purchase essential drugs or other critical supplies.”
Makueni Governor Mutula Kilonzo Junior said his county is operating at a deficit, forced to borrow from banks at the risk of penalties in case of default.
Makueni County Governor Mutula Kilonzo Junior.
“Even development projects have stalled because contractors cannot proceed when their raised certificates are not honoured,” he said.
“Contractors are becoming wary of county projects, incurring bank penalties when payments are delayed. This affects overall budget absorption and delivery of services,” Governor Kilonzo added.
Kirinyaga Governor Anne Waiguru said the November allocation enabled her administration to clear outstanding salaries and pay urgent recurrent bills, including 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,” Ms Waiguru said.
Nyandarua Governor, Kiarie Badilisha at a past event.
Nyandarua Governor Kiarie Badilisha, appearing before the Senate County Public Investments and Special Funds Committee on Monday, also flagged delayed disbursements as a challenge that hampers counties’ ability to run their affairs.
Homa Bay Finance CEC Solomon Obiero said the county, led by Governor Gladys Wanga, has relied on own-source revenue to plug the gap.
Homa Bay County Governor Gladys Wanga.
“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 her administration has not received any allocations this year, raising concerns about financial stability. The last transfer from the National Treasury reached the county in November 2025, leaving December and January disbursements pending.
“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,” Governor Wanga said.
She noted that pending bills to contractors and suppliers remain unpaid, threatening relationships with service providers and slowing development projects.
Nairobi County Governor Johnson Sakaja.
Nairobi Governor Johnson Sakaja acknowledged similar challenges, even though his county received the December allocation. He said that during the last Intergovernmental Budget and Economic Council meeting, governors and the national government agreed that the Treasury would disburse the salary component first in case of delays.
“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,” said Mr Sakaja.
In Murang’a County, Treasury officials said the last disbursement was received in early January for the November allocation.
“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.
At the coast, the crisis has hit Taita Taveta and Tana River counties hardest, with civil servants entering their second month of financial distress.
In Taita Taveta, delayed salary payments for November and December have reportedly demoralised staff and slowed essential services.
“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 county official who requested anonymity.
The situation is mirrored in Tana River, where officials said funds had been disbursed but are yet to reflect in the accounts.
“We cannot confirm anything. For now, our accounts remain dry,” a senior official said.
Lamu County Finance Executive Mohamed Mbwana, however, said the county has not experienced any delays in disbursement by the National Treasury. He said funds were channelled on time and are currently sufficient to sustain county operations.
“The only issue that sometimes hinders timely spending is the mandatory Electronic Government Procurement (e-GP) system introduced by the National Treasury,” said Mr Mbwana.
The financial turmoil comes as the Senate County Public Accounts Committee (CPAC), currently on retreat in Mombasa, issued a stern warning to governors over ballooning pending bills. Committee Chairperson, Senator Moses Kajwang’, emphasised that prioritising new projects or luxury spending over salaries and debts is no longer tenable.
“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,” said Mr Kajwang’.
President William Ruto had vowed to end undue delays in fund releases to counties, a problem that characterised his predecessor’s tenure. However, governors and senators have accused his administration of playing lip service, alleging that the National Treasury is starving counties of cash, forcing them to resort to expensive commercial loans.
Article 203(1)(j) of the Constitution requires that revenue to counties be stable and predictable, while Article 209 mandates that counties’ share of nationally raised revenue be transferred without undue delay or deductions. Section 17(6) of the Public Finance Management Act stipulates that the National Treasury must, at the start of every month and no later than the 15th, disburse monies to counties for the following month’s expenditure.
The Council of Governors has often complained that delays and unpredictable disbursements continue to disrupt service delivery across all 47 counties. This includes paralysis of critical operations such as salary payments, procurement of medical supplies, stalled development projects, and hampered drought and disaster response interventions.
Senators have also decried recurrent delays, noting that these increase the risk of counties accumulating large pending bills with penalties and interest. Contractors and suppliers are particularly affected, as outstanding bills remain unsettled.
National Treasury Cabinet Secretary John Mbadi, when reached for comment, maintained that there is no crisis. He said the government has continuously disbursed the equitable share to counties, 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. On the other hand, CS Mbadi pointed out that some counties, like Lamu, still have unspent billions in the County Revenue Fund (CRF) and should not complain about delays.
“We have begun releasing the December allocation, with Nairobi already receiving its share, and by the end of this week, we expect to have disbursed the entire December tranche, leaving only January outstanding,” said Mr Mbadi.
“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.
However, the latest cash crunch facing counties is not an isolated incident but part of a recurring pattern of delays that has bedevilled devolution since its inception.
In September last year, thousands of county employees across the country were plunged into financial distress after going up to three months without salaries, with many county governments blaming delayed disbursements from the National Treasury.
In July, the Treasury did not release any equitable share to counties, according to an Exchequer report, yet counties depend heavily on this allocation to pay salaries, finance development projects and settle bills owed to contractors.
In November 2024, governors threatened to shut down county operations entirely over delays by the National Treasury in releasing Sh63.6 billion in the equitable share of revenue.
Controller of Budget Margaret Nyakang’o.
According to Controller of Budget (CoB) Margaret Nyakang’o, delays by the National Treasury in disbursing the equitable share of nationally raised revenue remain among the key challenges undermining effective budget execution in counties.
In her recommendations, Dr Nyakang’o urged the National Treasury to adhere to a strict disbursement schedule and ensure that funds are transferred to County Revenue Funds (CRFs) by the 15th of every month.
She also called on Parliament to fast-track the enactment of the County Governments Allocation Act to guarantee timely transfers from the National Government.
“These measures will collectively strengthen budget implementation and accelerate county development,” she said.
The CoB’s county governments budget implementation review report for the first quarter of the current financial year indicates that Sh107.27 billion was available to counties to finance their operations.
Of this, Sh66.13 billion was the equitable share of nationally raised revenue, while Sh26.32 billion represented cash balances carried forward from the previous fiscal year ended June 30, 2025.
The report, released in November, shows that during the first quarter — covering July to September 2025 — counties generated Sh13.94 billion from their own revenue sources.
During the same period, counties’ cumulative expenditure stood at Sh55.15 billion, comprising Sh51.46 billion (93 per cent) on recurrent spending and Sh3.69 billion (7 per cent) on development projects.
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Additional reporting by George Odiwuor, Winnie Atieno and Kalume Kazungu
