Nairobi County has been locked out of the most recent spherical of disbursements of World Financial institution-funded Sh5.7 billion conditional grants to all of the devolved items, after it fell in need of assembly reform targets tied to the financing.
Paperwork from the State Division of Devolution, seen by the Enterprise Every day, revealed that the Nairobi County administration failed to fulfill a collection of reform targets on settling pending payments, enhancing Personal-Supply Income (OSR) assortment, and auditing its payroll system.
The Sh5.7 billion in grant disbursements to counties fall below the Second Kenya Devolution Help Programme (KSDP II) – a performance-based reform initiative carried out by the Authorities of Kenya with assist from the World Financial institution to strengthen county governance and repair supply.
The four-year Sh25.9 billion ($200 million) programme goals to enhance how counties finance, handle, coordinate, and account for his or her sources. It targets enchancment in areas corresponding to high quality of monetary statements and monetary reporting; compliance with budgeting codecs; adherence to procurement procedures; planning, monitoring and analysis; and county audits and public participation.
“Not like the Equitable Share Funding, KSDP II grants are strictly tied to efficiency. To qualify for grants, counties underwent assessments on particular reform targets. These included discount in pending payments, cleansing the County Human Useful resource information to attain consistency, reworking how counties handle employees efficiency and rising Personal Supply Income,” a doc ready by the Workplace of the Principal Secretary, State Division for Devolution states.
Earlier within the monetary yr, all counties, together with Nairobi, had acquired part one in every of disbursement below the KSDP II programme, with the next disbursement being tied to efficiency.
Not like the primary leg of disbursement in 2025/26 the place every county was allotted an equal quantity, the second leg was primarily based on every county’s success in assembly reform measures alongside the Fee on Income Allocation’s Fourth Foundation County Sharing System.
“Counties accessed smaller Degree I capability constructing grants by demonstrating the institution of primary governance frameworks. Below this grant, all 47 counties acquired Sh1.67 billion, with every receiving Sh32.5 million. To unlock a lot bigger Degree II improvement grants, nonetheless, counties needed to show precise outcomes by reaching reform targets”, the doc from the State Division for Devolution states.
The State Division for Devolution revealed that Nairobi County was locked out of the Sh5.7 billion World Financial institution financing due to the continued use of handbook payroll methods. The Controller of Finances, Ms Margaret Nyakang’o, has beforehand flagged Nairobi County for utilizing handbook payroll methods.
“Evaluation exhibits that Personnel Emoluments totalling Sh13.9 billion have been processed via the Human Useful resource Info System whereas Sh312 million was processed via handbook payrolls. The justification given for the continued use of handbook payrolls was that the affected employees are casuals and are engaged on a short-term foundation,” the Workplace of the Controller of Finances acknowledged in its county expenditure report for the 9 months ended March 2026.
Dr Nyakang’o’s workplace has additionally flagged Nairobi County for failure to stick to its plan for cost of commerce receivables for the 9 months ended March 2026.
“The County Government Committee submitted a generalised common cost plan, and the County Meeting submitted an in depth commerce payables cost plan, committing to pay Sh8.8 billion and Sh650.6 million, respectively, in 2025/26. The County Government and County Meeting didn’t adhere to their cost plan. The County Government cleared solely Sh4.9 billion whereas the County Meeting didn’t clear something,” the Workplace of the Controller of Finances states.
Information from the Nairobi County Meeting present that Nairobi Metropolis County set an OSR goal of Sh19.9 billion for the 2025 monetary interval, however solely collected roughly Sh13.7 billion.
The World Financial institution information exhibits that the most important recipients within the Sh5.7 billion KSDP II disbursement are Kitui, Kwale and Migori counties, which acquired Sh184.8 million every, accounting for 13.3 % of the overall disbursement. Kajiado, Kakamega and Uasin Gishu acquired the least allocation at Sh55.3 million every. The common allocation per county stands at Sh123.9 million.
