A recent report by Controller of Budget Margaret Nyakang'o has revealed that Kenyan counties spent barely half of their development budgets in the 2025-26 financial year. The report shows that counties spent Sh126.69 billion on development, representing 54.21 per cent of the approved development budget of Sh233.69 billion. This expenditure accounted for just 25.51 per cent of total county spending.
The report highlights that 42 counties recorded development budget absorption rates below 75 per cent. Counties such as Kisumu, Elgeyo Marakwet, Siaya, Narok, Laikipia, Nakuru, and Kisii recorded the lowest absorption rates for development. Kisumu spent a paltry 25.92 per cent of its annual development budget of Sh10.09 billion, followed by Siaya at 26.53 per cent, Elgeyo Marakwet at 34.17 per cent, and Narok at 34.42 per cent.
On the other hand, only four counties surpassed the 75 per cent threshold, with Kilifi leading at 84.52 per cent, followed by Wajir at 83.03 per cent, Mandera at 80 per cent, and Meru at 79.04 per cent. Nyakang'o urged county governments to take corrective measures to improve spending and directed county treasuries to monitor the monthly absorption of the development budget.
The slow implementation of development projects comes against the backdrop of a growing wage bill that continues to consume a substantial share of county revenues. Counties spent Sh235.96 billion on employee compensation in the year under review, representing 39.54 per cent of their combined reported revenue of Sh596.78 billion. This figure exceeds the statutory threshold of 35 per cent, leaving less money available for development and service delivery.
Nyakang'o recommended that counties contain their wage bills and align recruitment with available resources. She suggested payroll audits, tighter recruitment controls, staff rationalisation, and the enforcement of approved staff establishment limits. The pressure on county finances is compounded by mounting unpaid bills, which threaten to divert funds from current development programmes to settle past obligations.
As of June 30, 2026, counties had reported outstanding trade payables of Sh172.53 billion, excluding Nandi county. Of this amount, Sh126.40 billion related to recurrent expenditure, while Sh46.15 billion was owed for development activities. Nyakang'o emphasized the need for counties to manage their finances effectively to ensure the implementation of development projects.
The Controller of Budget's report paints a picture of counties struggling to translate billions of shillings in public resources into tangible development. The low absorption of development funds undermines the implementation of approved projects, and counties must take urgent action to address this challenge. By doing so, counties can ensure that development projects are implemented effectively, improving livelihoods and stimulating economic growth.
Key points
- Kenyan counties have left Sh107 billion in development funds idle due to low absorption rates.
- 42 counties recorded development budget absorption rates below 75 per cent.
- Counties spent Sh235.96 billion on employee compensation, exceeding the statutory threshold of 35 per cent.
