Nairobi City County has reported a 14.9% increase in own-source revenue collection during the 2025/26 financial year, collecting Sh15.54 billion compared to Sh13.53 billion in 2024/25. The Controller of Budget attributed the improvement to "aggressive revenue mobilisation", particularly through administrative and enforcement measures. However, the increase was not enough to meet the County's annual own-source revenue target, representing 72% of the target.
The County's revenue arrears stood at Sh62.77 billion at the beginning of the financial year, declining to Sh59.09 billion by June 30, 2026. Land rates accounted for the bulk of the arrears at Sh51.34 billion, representing 87%, while wayleaves owed by Kenya Power and Lighting Company stood at Sh5.64 billion. The County has introduced administrative and enforcement measures to recover the outstanding amounts.
Despite efforts to improve collection, Nairobi faced pressure in meeting its salary obligations, with personnel expenditure amounting to Sh17.82 billion during the financial year, equivalent to 51.3% of total revenue. However, salaries were processed for only 10 months, from July 2025 to April 2026, due to insufficient budget estimates for personnel emoluments.
The County Executive used an overdraft facility with Sidian Bank to address salary pressures, with an outstanding balance of Sh3.26 billion attributed to unpaid salaries for May and June. The County Assembly also had an overdraft facility with Co-operative Bank, with an outstanding balance of Sh35 million arising from unpaid June salaries.
Nairobi spent Sh33.10 billion on development and recurrent programmes during the financial year, representing 95% of the funds released by the Controller of Budget. Of this amount, Sh3.82 billion went to development programmes, while Sh29.28 billion was spent on recurrent programmes. Development spending accounted for only 28.5% of the approved development budget.
The County's trade payables stood at Sh83.10 billion at the beginning of the financial year, with the County Executive accounting for Sh82.83 billion and the County Assembly owing Sh271.24 million. During the year, the County Executive settled Sh8.41 billion in trade payables, but outstanding trade payables had risen to Sh85.78 billion for the County Executive and Sh1.12 billion for the County Assembly by June 30, 2026.
The Controller of Budget also questioned the classification of some Nairobi expenditure, including Sh2.27 billion spent under "Other Operating Expenses - Other", representing 19.79% of its operations and maintenance expenditure. The review found that some expenditure items had been placed under the general category, and the Controller of Budget directed that such expenditure be mapped to the appropriate budget codes.
Key points
- Nairobi City County collected Sh15.54 billion in own-source revenue during 2025/26, a 14.9% increase from 2024/25.
- The County's revenue arrears declined to Sh59.09 billion by June 30, 2026.
- Nairobi spent Sh33.10 billion on development and recurrent programmes during the financial year, representing 95% of the funds released by the Controller of Budget.
