Sakaja explains City Hall’s huge debts, zero expenditure on development

Nairobi Governor Johnson Sakaja has explained City Hall’s huge pending bills, ‘low’ revenue collection and non-expenditure on development in three months.

The Controller of Budget Margaret Nyakangó released a report that said Nairobi has not implemented any development projects in the first three months of the financial year

The County Governments Budget Implementation Report for first-quarter of the current financial year said Nairobi accounts for 65 per cent of the Sh168 billion total pending bills accumulated by all the 47 devolved units.

“We are working and we are properly on course to make Nairobi work,” Sakaja said.

He said projects are being implemented across the city’s 85 wards but payments were yet to reflect because the county shifted to e-procurement platform.

“We have not just paid the contractors for the projects but we have projects running across," Sakaja said.

"The reason for this is because we were onboarding all our procurements to an e-platform and that took time because of training and sensitisation."

The report that covers July 1 and September 30, 2023 further said Nairobi collected a paltry 8.6 per cent of its annual own source revenue collection target over the period.

Nairobi is among the 10 counties that collected less than 10 per cent of their annual targets in the first three months of the year.

Other counties are Machakos, Nandi, Kericho, Lamu, Kajiado, Kakamega, Tana River and Mombasa.

Sakaja said his administration has disbursed Sh23 million to each of the 85 wards for uniform development across the city.

“We have so many projects that are going on across the city. And as we have always said, we have to make it work in Nairobi,” the governor said.

On the huge pending bills, which currently stands at Sh107.33 billion, the county chief attributed the problem to historical debts his administration inherited.

“Nairobi accounted for 65.6 per cent of the stock of pending bills at Sh107.33 billion. Other Counties with a high level of pending bills are Kiambu at Sh5.62 billion, Wajir at Sh5.38 billion, and Mombasa at Sh4.10 billion,” the CoB report states.

He said he inherited in excess of Sh100 billion debt from the past regimes including the defunct City Council.

“These are historical bills. In fact, during our time, we have accumulated little, if any, pending bills. But our aim is not to accumulate more but to see how to clear the current bills,” he said.

Sakaja said a huge chunk of the debts are owed to pension schemes – Laptrust, Lapfund and County Pension Funds and statutory institutions such as NSSF, NHIF and KRA.

“We inherited pending bills on legal fees alone of Sh21 billion. It is a crisis that we are trying to resolve and we are certain we will do,” he said.

Sakaja dismissed the report which said Nairobi's own source revenue collection plunged in the first three months of the financial year.

He said the amounts collected over the period this year are higher than the collection the county posted the same time last year.

In the first three months of the current financial year, the county collected Sh1.72 billion representing 8.6 per cent of the annual own source revenue target of Sh19.99 billion.

This is an increase compared to Sh1.19 billion or 6.6 per cent of the Sh18.02 billion posted in first quarter last year.

“We set ourselves ambitious targets and that is what we are working towards,” Sakaja said.

The governor said the first quarters of fiscal years are always low seasons for revenue collections.

“High seasons are normally the third and fourth quarters and that can explain why the collections are not that high,” he said.

While exuding confidence that his administration will realise its revenue targets, Sakaja said City Hall has fully embraced digital revenue collection.

The automated revenue collection system has sealed weaknesses and leakages associated to manual collections prone to abuse.