Mounting debt crisis as pending bills at counties now climb to Sh10 billion

Details have emerged of 10 counties that continue to accumulate pending bills, piling pressure on contractors and suppliers and exposing deep cracks in fiscal discipline.

Latest findings from budget implementation review reports show that the affected counties collectively added close to Sh10 billion in new debt within just six months.

This is despite clear legal requirements and parliamentary resolutions to prioritise settlement of outstanding obligations.

The reports by Controller of Budget Margaret Nyakang’o flagged Kilifi, Kisumu, Turkana, Uasin Gishu, Vihiga, Trans Nzoia, Tana River, Samburu, Nyamira and Migori.

The trend stands in sharp contrast to a section of counties that are aggressively clearing inherited debts, highlighting widening disparities in financial management more than a decade after the advent of devolution.

The analysis, covering the period between June 30, 2025 and December 31, 2025, reveals a mixed performance across the 47 counties.

, raising concerns about sustainability, accountability and service delivery.

Kilifi county, led by Governor Gideon Mung’aro, recorded the highest increase in pending bills during the period under review.

The county’s debt surged by Sh4.88 billion, rising from Sh9.26 billion in June to Sh14.14 billion by December, making it the worst performer in terms of new debt accumulation.

Kisumu county under Governor Anyang’ Nyong’o also registered a sharp rise in pending bills, which grew by Sh1.75 billion to stand at Sh3.1 billion by the end of the period.

Turkana’s pending bills increased by Sh982 million, while Uasin Gishu recorded a rise of Sh558 million.

Trans Nzoia’s debt also ballooned by Sh457 million, adding to concerns over the county’s fiscal position.

Elsewhere, Migori county’s pending bills rose by Sh207 million, Nyamira recorded an increase of Sh400.65 million, while Samburu’s debt grew by Sh84.98 million.

Tana River posted a relatively smaller increase of Sh16 million, but still remained among counties struggling to contain rising obligations.

Nyakang’o attributed the surge in pending bills partly to the failure by some county governments to adhere to agreed payment plans.

“Several county governments did not follow their scheduled payment plans for outstanding trade payables,” she said in her report for the period ending December 31, 2025.

The failure to honour payment obligations has had far-reaching consequences for suppliers and contractors, many of whom rely on timely payments to sustain operations.

Delays have triggered cash flow constraints, stalled projects and, in some instances, forced businesses to shut down.

Under Regulation 55(2)(b) of the Public Finance Management (County Governments) Regulations, 2015, counties are required to prioritise the settlement of eligible pending bills as a first charge in their budgets.

The law further stipulates that debt servicing must take precedence to prevent counties from defaulting on their financial obligations.

“Debt service payments shall be a first charge on the County Revenue Fund, and the accounting officer shall ensure this is done to the extent possible so that the county government does not default on debt obligations,” the regulations state.

Despite this clear legal framework, the continued accumulation of pending bills points to systemic challenges in financial planning, expenditure control and accountability within some county administrations.

Governors have often blamed delays in exchequer disbursements from the national government, as well as underperformance in local revenue collection, for the rising stock of pending bills.

However, critics argue that deeper structural issues are at play, including unrealistic revenue projections, weak fiscal discipline, corruption and the alleged introduction of fictitious claims designed to siphon public funds.

In contrast, a number of counties have demonstrated strong fiscal discipline by significantly reducing their pending bills, offering relief to contractors and restoring confidence among suppliers.

At the forefront is Nairobi county under Governor Johnson Sakaja, which posted the most impressive performance among the 47 counties.

The county reduced its pending bills by Sh6.72 billion within six months, translating to an average monthly payment of Sh1.12 billion.

Nairobi’s total debt dropped from Sh86.77 billion in June to Sh80.04 billion in December, marking a major step toward easing the burden on contractors who have long decried delayed payments.

Kiambu county, led by Governor Kimani Wamatangi, also recorded notable progress, cutting its pending bills by Sh2.63 billion to Sh5.26 billion.

Similarly, Nakuru county under Governor Susan Kihika reduced its debt by Sh1.52 billion to stand at Sh2.16 billion as of December 31, 2025.

Murang’a county also posted strong gains, reducing its pending bills by Sh1.04 billion to Sh951.76 million, while Machakos trimmed its debt from Sh6.73 billion to Sh5.70 billion over the same period.

Kwale and Marsabit counties also made significant strides, reducing their pending bills by Sh1.20 billion and Sh1.03 billion, respectively, bringing their outstanding obligations down to Sh697.05 million and Sh408.28 million.

Beyond the top performers, several other counties registered commendable improvements. Bomet reduced its pending bills by Sh909.37 million, Narok by Sh945 million and Meru by Sh972 million.

Nyandarua cut its obligations by Sh496 million, Mandera by Sh730 million and Makueni by Sh442.39 million.

Mombasa reduced its pending bills by Sh764 million, Garissa by Sh955 million and Bungoma by Sh764 million.

Kericho, Embu and Nandi also recorded modest reductions of Sh426 million, Sh434 million and Sh423.29 million, respectively.

The trend of reducing pending bills has come as a relief to contractors, many of whom have struggled with delayed payments that have disrupted business operations and eroded profitability.

The mixed performance across counties underscores uneven implementation of public finance management practices, raising questions about the effectiveness of oversight mechanisms at the devolved level.

According to the Controller of Budget’s report, county governments collectively owed Sh163.74 billion in pending bills as of December 31, 2025.

This marked a slight improvement from Sh183.03 billion recorded in June and Sh177.47 billion in September.

While the overall reduction suggests progress at the national level, the continued accumulation of new debts in some counties poses a significant risk to service delivery and economic stability.

“The high level of trade payables poses challenges to service delivery and disrupts business operations,” Nyakang’o said.

She has now urged county governments to strictly adhere to legal provisions and prioritise the settlement of pending bills in their budgets.

“County governments should prioritise settling eligible trade payables in their budgets, in accordance with legal regulations.”

“Furthermore, they should adhere to the trade payables action plan established for the financial year 2025-2026,” she said.

INSTANT ANALYSIS

For contractors and suppliers, the stakes remain high. Delayed payments not only stall projects but also threaten livelihoods, making the clearance of pending bills a critical issue in ensuring the success of devolution and the stability of local economies. With the 2025-26 financial year underway, all eyes will be on county governments to see whether they can sustain debt reduction efforts or whether the cycle of accumulation will persist, prolonging the suffering of businesses that depend on timely payments.