Nairobi eases debt burden by cutting pending bills by Sh35 billion
Nairobi’s arrears stood at Sh121.78 billion as of June 30, 2024, with Sh121.26 billion linked to the County Executive and Sh513.92 million owed by the County Assembly.
Nairobi County’s longstanding debt challenge has eased after the county cut down pending bills by close to Sh35 billion in the past financial year, the Controller of Budget has revealed in her latest review.
According to the County Governments Budget Implementation Review Report, Nairobi’s arrears stood at Sh121.78 billion as of June 30, 2024, with Sh121.26 billion linked to the County Executive and Sh513.92 million owed by the County Assembly.
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By June 30, 2025, the figure had dropped to Sh86.77 billion following payments, reconciliations, and negotiations with creditors.
In the 2024/25 financial year, the County Executive cleared Sh7.56 billion in bills. Out of this, Sh5.84 billion was spent on recurrent obligations, while Sh1.72 billion went to development projects.
The Assembly settled Sh283.17 million, mostly tied to recurrent expenses.
The Controller of Budget said the County Executive had initially committed to paying Sh800 million but surpassed its pledge by far.
“The County Executive submitted a summarised pending bills payment plan and committed to paying Sh800 million. In practice, it surpassed this pledge, settling bills worth Sh7.56 billion. This reflects an enhanced focus on discipline and prioritisation in the settlement of obligations,” the report noted.
An analysis of the debts shows that Nairobi is gradually reducing its most urgent obligations. Sh12.61 billion, representing 14.5 per cent of the pending bills, is less than a year old, while Sh74.15 billion has been outstanding for more than three years.
The largest share of the older arrears is linked to salaries, statutory payments, and staff-related claims that have piled up over different administrations.
Governor Johnson Sakaja has repeatedly said the pending bills are a historical problem, but insisted his government is tackling them head-on. Speaking on a radio programme on Thursday, he explained that part of the reduction followed an audit of claims that revealed some were irregular.
“We have already reduced them by close to Sh39 billion and will continue with the review process,” he said, pointing out that legal bills are being re-examined and more county lawyers are being engaged to cut dependence on private firms.
He further underlined that the challenge is not recent. “As we make Nairobi work, we must also resolve past issues, because Nairobi didn’t start in 2022,” he said.
The report attributes the improvement to stronger revenue mobilisation, better absorption of the budget, and a deliberate decision to allocate more resources towards clearing debts.
Analysts observe that the sharp decline is not only easing the strain on suppliers and contractors but is also releasing cash back into the economy, reviving stalled works and boosting confidence among investors.
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