Controller of Budget Margaret Nyakang'o/ FILE
County governments spent barely half of their development budgets in the 2025-26 financial year, exposing the scale of stalled development as salaries and recurrent expenditure continue to burn counties billions.
A new report by Controller of Budget Margaret Nyakang’o reveals that counties spent Sh126.69 billion on development, representing 54.21 per cent of the approved development budget of Sh233.69 billion.
The expenditure accounted for just 25.51 per cent of total county spending, highlighting the slow pace of investment in projects meant to improve livelihoods and stimulate economic growth.
The report paints a picture of counties struggling to translate billions of shillings in public resources into tangible development, with 42 counties recording development budget absorption rates below 75 per cent.
According to the report, Kisumu, Elgeyo Marakwet, Siaya, Narok, Laikipia, Nakuru and Kisii recorded the lowest absorption rates for development.
Kisumu spent a paltry 25.92 per cent of its annual development budget of Sh10.09 billion, followed by Siaya at 26.53 per cent, Elgeyo Marakwet at 34.17 per cent and Narok at 34.42 per cent.
Laikipia absorbed 45.49 per cent, Nakuru absorbed 48.97 per cent, Kisii at 41.01 per cent and Kiambu at 43.19 per cent
Only four counties surpassed the 75 per cent threshold, with Kilifi leading at 84.52 per cent, followed by Wajir at 83.03 per cent, Mandera at 80 per cent and Meru at 79.04 per cent.
Nyakang’o said the low absorption of development funds undermines the implementation of approved projects and urged county governments to take corrective measures to improve spending.
“I have directed that county treasuries should also monitor the monthly absorption of the development budget and take immediate corrective action through lawful supplementary budgets when bottlenecks occur,” she said.
The slow implementation of development projects comes against the backdrop of a growing wage bill that continues to consume a substantial share of county revenues.
Interestingly, the counties spent Sh235.96 billion on employee compensation in the year under review, representing 39.54 per cent of their combined reported revenue of Sh596.78 billion.
The figure exceeds the statutory threshold of 35 per cent, leaving less money available for development and service delivery.
Homa Bay recorded the highest wage bill-to-revenue ratio at 56.21 per cent, followed by Nyeri at 52.14 per cent and Taita Taveta at 49.23 per cent.
Nyakang’o said counties must contain their wage bills and align recruitment with available resources.
“County governments should implement payroll containment measures to reduce the wage bill to within the 35 per cent threshold provided for by Section 107(2) of the PFM Act by June 30, 2028,” she said.
She recommended payroll audits, tighter recruitment controls, staff rationalisation and the enforcement of approved staff establishment limits.
The pressure on county finances is compounded by mounting unpaid bills, which threaten to divert funds from current development programmes to settle past obligations.
As of June 30, 2026, counties had reported outstanding trade payables of Sh172.53 billion, excluding Nandi county, which had not submitted its figures.
Of this amount, Sh126.40 billion related to recurrent expenditure, while Sh46.15 billion was owed for development activities.
