Counties spend twice as much on salaries as on development, Controller of Budget report reveals
Overall, the counties used Sh229.62 billion on recurrent expenses—about 80 per cent of total expenditure—leaving development activities grossly underfunded.
County governments have spent more than twice as much on salaries as they have on development projects in the first nine months of the 2024-25 financial year, a new report by the Controller of Budget has revealed.
The report by Controller of Budget Margaret Nyakang’o shows counties had spent only Sh56.87 billion on development by March 31, against an annual allocation of Sh220.20 billion—an absorption rate of just 26 per cent.
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Ideally, counties should have used at least Sh165.15 billion by the end of the third quarter to keep up with their development targets.
In contrast, the report shows that counties spent Sh154.94 billion on staff emoluments, which include salaries and allowances. This accounts for 54 per cent of their total spending during the period.
“The recurrent expenditure comprised Sh154.94 billion (54 per cent) on compensation to employees and Sh74.68 billion (26 per cent) on operations and maintenance expenditure,” the report says.
Overall, the counties used Sh229.62 billion on recurrent expenses—about 80 per cent of total expenditure—leaving development activities grossly underfunded.
The Controller of Budget flagged a worrying trend where counties seem to favour paying salaries at the expense of improving services and infrastructure for residents.
“Analysis of development expenditure as a proportion of the approved annual development budget showed 36 county governments had an absorption rate of 30 per cent or less, and no county government had a development absorption rate exceeding 50 per cent,” the report states.
The worst-performing counties include Nakuru and Kisumu, which only spent 10 per cent of their development budgets, followed by Lamu at 13 per cent and Taita Taveta at 14 per cent. Other poor performers include Embu (16 per cent), Nairobi (17 per cent), Nyeri (18 per cent), Baringo (18 per cent), Kajiado (19 per cent) and Kisii (19 per cent).
Counties spending the most on salaries include Nairobi (Sh12.83 billion), Kiambu (Sh6.38 billion), Kakamega (Sh4.98 billion), Machakos (Sh5.2 billion), Kitui (Sh4.4 billion) and Kisumu (Sh4.18 billion).
Nakuru spent Sh4.8 billion out of its Sh8.5 billion expenditure on salaries, while Lamu allocated Sh1.43 billion out of Sh2.22 billion for the same.
The Controller urged counties to comply with Section 107(2)(b) of the Public Finance Management Act of 2012, which requires that at least 30 per cent of the budget be directed to development over the medium term.
On a positive note, a few counties are closer to meeting the target.
Busia recorded the highest development budget absorption rate at 45 per cent, followed by Garissa and Mandera (41 per cent), Narok (39 per cent), and Siaya and Nandi (36 per cent).
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