EDITORIAL: Counties drowning in debt a national wake-up call to do better

EDITORIAL

Kenya’s county governments are sinking under a mountain of debt, with commercial loans totalling Sh7.85 billion, highlighting a systemic cash crisis that threatens the very delivery of public services.

The latest report from the Controller of Budget paints a stark picture: delayed allocations from the National Treasury and underperforming local revenue streams have forced counties – even resource-rich ones like Nairobi – to borrow heavily to pay salaries, utilities and operational costs.

This reliance on high-interest credit is not a short-term inconvenience; it is a ticking fiscal time bomb.

Nairobi alone owes Sh6.04 billion to commercial banks, while counties such as Machakos and Homa Bay are borrowing to keep their payrolls afloat.

The interest, penalties and commissions that accompany these loans are eroding scarce resources, leaving counties little room to invest in development, infrastructure or social programmes.

The situation exposes weaknesses in both national and county-level fiscal management.

While delayed treasury disbursements exacerbate the crisis, the underperformance in own-source revenue – with many counties achieving less than 20 per cent of targets – reveals systemic inefficiencies in revenue collection and administration.

Borrowing to cover recurrent expenditure is a temporary fix that undermines long-term fiscal stability.

The national and county governments must urgently adopt coordinated measures, including the timely release of equitable shares, innovative revenue collection strategies, and stringent oversight of borrowing.

Without immediate reforms, counties risk a vicious cycle of debt dependence, crippled service delivery and growing public dissatisfaction.

The cash crunch is more than numbers on a ledger — it is a challenge that affects ordinary Kenyans. The time for decisive action is now; the country cannot afford to let devolved governance fail for lack of financial prudence.

Quote of the Day:“Most people spend more time and energy going around problems than in trying to solve them.” —Henry Ford patented a method of constructing plastic auto bodies on January 13, 1942