NAIROBI, Kenya – Nairobi’s building and construction sector has surged to become the primary revenue source for City Hall, according to the Controller of Budget’s latest report for the first quarter of the financial year.
The county generated 22% of its own source revenue from fees collected for building permits and inspections, surpassing parking fees, which have historically been the leading local revenue stream.
The report highlights that between July and September 2024, the county collected Sh484 million from building permits and inspections, marking the highest contribution to the county’s taxes.
In comparison, parking fees, which brought in Sh434 million, now account for 20% of the revenue.
“The highest revenue stream, Sh484.39 million, was from plans and inspections (building permits), which contributed 22% of the total OSR receipts during the reporting period,” the report stated.
In total, Nairobi’s self-generated revenue for the Financial Year 2024-2025 stands at Sh2.26 billion, reflecting a 31% increase from Sh1.72 billion during the same period in the previous fiscal year.
The rise in revenue from building permits, an 86% jump from Sh260.5 million in 2023, is largely attributed to the national government’s affordable housing initiative and the influx of Chinese private developers in areas like Kilimani and Hurlingham.
Other notable revenue sources include unified business permits, which generated Sh275.81 million, and fees from health facilities, amounting to Sh382 million.
Overall, the report indicates that the Sakaja administration is on track to meet its Sh20 billion revenue target for the financial year.
“During the first quarter of FY 2024/25, the county generated Sh2.26 billion from its sources of revenue, including Appropriation In Aid and Facilities Improvement Financing. This amount was an increase of 31% compared to Sh1.72 billion realised in a similar period in FY 2023/24 and was 11% of the annual target and 133% of the equitable revenue share disbursed,” the report says.
However, the county faces challenges with pending bills to suppliers, which have hampered financial liquidity for traders.
As of June 30, 2024, pending bills amounted to Sh121.78 billion.
Efforts to settle these debts have been minimal, with only Sh175.37 million paid for recurrent expenditures and Sh31.73 million by the county assembly, leaving an outstanding balance of Sh121.57 billion as of September 30, 2024.
This financial strain comes amid growing concerns over transparency in the issuance of building permits.
City residents have expressed alarm over the proliferation of poorly planned skyscrapers, a concern amplified by incidents of collapsed buildings last year.
Members of the County Assembly (MCAs) and activists have called for reforms in the permit issuance process and enhanced oversight of construction activities.
The Urban Planning Technical Committee has been scrutinized for alleged irregularities in approvals.
A probe by the County Assembly Sub-Committee on Planning, led by nominated MCA Nasra Nanda, revealed that on March 8, 2024, 131 building plans were approved without proper oversight, actions deemed illegal as they bypassed the designated authorities.
The county generated 22% of its own source revenue from fees collected for building permits and inspections, surpassing parking fees, which have historically been the leading local revenue stream.
The report highlights that between July and September 2024, the county collected Sh484 million from building permits and inspections, marking the highest contribution to the county’s taxes.
In comparison, parking fees, which brought in Sh434 million, now account for 20% of the revenue.
“The highest revenue stream, Sh484.39 million, was from plans and inspections (building permits), which contributed 22% of the total OSR receipts during the reporting period,” the report stated.
In total, Nairobi’s self-generated revenue for the Financial Year 2024-2025 stands at Sh2.26 billion, reflecting a 31% increase from Sh1.72 billion during the same period in the previous fiscal year.
The rise in revenue from building permits, an 86% jump from Sh260.5 million in 2023, is largely attributed to the national government’s affordable housing initiative and the influx of Chinese private developers in areas like Kilimani and Hurlingham.
Other notable revenue sources include unified business permits, which generated Sh275.81 million, and fees from health facilities, amounting to Sh382 million.
Overall, the report indicates that the Sakaja administration is on track to meet its Sh20 billion revenue target for the financial year.
“During the first quarter of FY 2024/25, the county generated Sh2.26 billion from its sources of revenue, including Appropriation In Aid and Facilities Improvement Financing. This amount was an increase of 31% compared to Sh1.72 billion realised in a similar period in FY 2023/24 and was 11% of the annual target and 133% of the equitable revenue share disbursed,” the report says.
However, the county faces challenges with pending bills to suppliers, which have hampered financial liquidity for traders.
As of June 30, 2024, pending bills amounted to Sh121.78 billion.
Efforts to settle these debts have been minimal, with only Sh175.37 million paid for recurrent expenditures and Sh31.73 million by the county assembly, leaving an outstanding balance of Sh121.57 billion as of September 30, 2024.
This financial strain comes amid growing concerns over transparency in the issuance of building permits.
City residents have expressed alarm over the proliferation of poorly planned skyscrapers, a concern amplified by incidents of collapsed buildings last year.
Members of the County Assembly (MCAs) and activists have called for reforms in the permit issuance process and enhanced oversight of construction activities.
The Urban Planning Technical Committee has been scrutinized for alleged irregularities in approvals.
A probe by the County Assembly Sub-Committee on Planning, led by nominated MCA Nasra Nanda, revealed that on March 8, 2024, 131 building plans were approved without proper oversight, actions deemed illegal as they bypassed the designated authorities.
