Financial distress threatens devolution as counties struggle with bloated wage bills, delayed funds
A Senate Public Accounts Committee report based on the Auditor General’s 2023–24 audit showed that 36 counties had breached the legal ceiling on wage bills, spending beyond the 35 per cent limit set in law.
Despite receiving more than Sh4.7 trillion from the national government since the start of devolution in 2013, most counties remain in a cycle of financial distress, weighed down by bloated wage bills, delayed Treasury disbursements and weak revenue collection.
The result has been frequent service disruptions and stalled development projects as many devolved units struggle to stay afloat.
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“The intention is to have the counties generate their own revenue, enough for development. But today, even giant counties such as Nairobi, Mombasa and Kisumu cannot stand on their own,” said governance expert Javas Bigambo.
A Senate Public Accounts Committee report based on the Auditor General’s 2023–24 audit showed that 36 counties had breached the legal ceiling on wage bills, spending beyond the 35 per cent limit set in law.
Kisii County led with 60 per cent of its total revenue going to salaries. Governor Simba Arati’s staff audit revealed 861 ghost workers in county departments.
“Only 11 counties complied with the 35 per cent wage bill ceiling, while 16 counties exceeded 50 per cent of their revenue on wages, severely constraining operational and development budgets,” the report states.
Other counties spending more than half of their revenue on wages include Mombasa (57 per cent), Laikipia (55 per cent), Elgeyo Marakwet (55 per cent) and Nyeri (55 per cent).
Murang’a follows with 54 per cent, while Homa Bay and Nyamira stand at 53 per cent. Kisumu, Taita Taveta and Machakos are each at 52 per cent, with Kericho, Bomet, Meru and Tharaka Nithi at 50 per cent.
According to the Public Finance Management (County Governments) Regulations of 2015, counties should not spend more than 35 per cent of their revenue on salaries.
But a Salaries and Remuneration Commission (SRC) bulletin for the second quarter of the 2024–25 financial year shows that 41 counties were in violation of this rule.
Only six counties, Kilifi, Tana River, Busia, Narok, Nakuru and Kwale met the legal threshold.
Kilifi led with the lowest wage bill at 26.2 per cent, followed by Tana River (29.4 per cent), Busia (31 per cent), Narok (32 per cent), Nakuru (33 per cent) and Kwale (35 per cent).
Oversight agencies, including the Auditor General, Controller of Budget, the SRC and the Senate, have consistently flagged counties for over-employment, irregular hiring and payroll fraud.
Despite the warnings, the problems remain unresolved, locking counties into chronic financial instability and heavy reliance on the national government.
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