NASSIR: Paying for public land use is a matter of fairness, not favour

As Kenya continues to engage in a robust national conversation on urban financing - highlighted most recently by the cooperation framework between the national government and Nairobi county - it is both timely and necessary to bring clarity to one of the most consequential, yet often underappreciated, revenue streams available to county governments: Contribution in Lieu of Rates (Cilor).

At its core, Cilor refers to payments made by the national government to county governments in respect of public land and properties that are otherwise exempt from standard property rates.

These include government offices, institutions and other public assets that occupy prime urban land but do not fall within the conventional rating framework applicable to private property owners.

This mechanism is not merely technical; it is foundational. For counties such as Mombasa, where a significant proportion of land is held or utilised by national entities, Cilor represents a critical pillar in the architecture of own-source revenue.

Without it, the fiscal base of devolved units is materially constrained, undermining both service delivery and long-term financial sustainability.

The principle underpinning Cilor is straightforward: public land still benefits from county services. Roads are maintained, drainage systems are constructed and managed, solid waste is collected, public health standards are enforced and urban planning frameworks are implemented.

These services are not selective; they are universal. Therefore, it is both equitable and logical that national assets contribute to the cost of maintaining the urban ecosystem in which they operate.

In practice, however, the realisation of this revenue stream has not been achieved for county governments. Obfuscation, under-assessments and the absence of a clear and enforceable regulatory framework have limited the effectiveness of Cilor across the country.

This has had tangible consequences. Counties are compelled to stretch limited resources, often prioritising essential services at the expense of long-term investments in infrastructure, resilience and economic growth.

For Mombasa, the implications are particularly pronounced. As a strategic port city and a hub of national and regional significance, we host a substantial footprint of national government institutions and infrastructure. While we are proud to play this role, it comes with a fiscal responsibility that must be equitably shared.

Honouring Cilor obligations would not only enhance our capacity to deliver services but also strengthen the broader objective of balanced urban development across the country.

This is why the current national focus on urban financing must go beyond frameworks and partnerships to address the fundamentals. Sustainable cities cannot be built on uncertain revenue streams. Devolution, as envisioned in our constitution, is predicated on both functional and fiscal autonomy. Counties must have access to predictable, adequate and legally grounded sources of revenue to discharge their mandates effectively.

In this regard, the implementation of the National Rating Act that was recently assented to by the President presents a pivotal opportunity.

The Act provides a modernised legal framework for property rating in Kenya, with the potential to harmonise practices, enhance transparency and expand the revenue base for counties.

However, legislation alone is not sufficient. Its success will depend on the timely development of clear, practical and enforceable regulations.

It is here that the role of the National Land Commission becomes central. I wish to take this opportunity to congratulate the newly empanelled Ccmmissioners.

Their mandate comes at a critical juncture in our country’s urban and fiscal evolution. The expectations are high, but so too is the opportunity to make a lasting impact.

I urge the commission to prioritise the development of regulations that will give full effect to the National Rating Act, including clear provisions on Cilor. Such regulations must address valuation methodologies, payment frameworks, timelines and enforcement mechanisms.

They must also be developed in close consultation with county governments, the National Treasury and other relevant stakeholders to ensure practicality and buy-in.

Equally important is the need for collective support. The success of these reforms will not rest on the commission alone. All stakeholders, national and county governments, oversight institutions and the public—must play their part.

This is not a zero-sum exercise. Strengthening county revenue systems ultimately strengthens the entire country. When counties are financially stable, they are better able to invest in infrastructure, support local economies and improve the quality of life for citizens.

For Mombasa, and indeed for all counties, the message is clear: honouring fundamental revenue streams such as Cilor is not optional, it is essential. It is a matter of fairness, of constitutional fidelity and of practical necessity.

It is also a decisive step towards achieving the sustainability of devolved units, which remains one of the most transformative aspirations of our governance system.

As we move forward, let us align policy with practice, law with implementation and ambition with accountability. The future of our cities and the success of devolution itself depends on it.

The writer is the Mombasa governor