NAIROBI — County governments are spending nearly half of their budgets on salaries and allowances, starving critical development projects of funds and raising fresh questions about the sustainability of devolution.
The latest report by Controller of Budget Margaret Nyakang’o shows counties paid Sh220.64 billion in wages in the year ending June 30, 2025—an increase of Sh10.8 billion from the previous year.
Personnel costs accounted for 47 percent of total expenditure (Sh470.23 billion) and 41 percent of actual revenue (Sh533.11 billion), well above the 35 percent ceiling set by law.
“The National Wage Bill Conference resolved that counties refine strategies to reduce payroll spending, but compliance has been poor,” Dr. Nyakang’o said.
Only eight counties, including Kilifi (24 percent), Siaya (26 percent), Tana River (27 percent), and Nakuru (30 percent), met the legal limit on wage spending.
In contrast, Nyeri (55 percent), Machakos (54.5 percent), and Baringo (53.4 percent) topped the list of overspenders, with more than half their revenue going to salaries. Nairobi, the country’s economic hub, spent 50.8 percent of its income on wages.
The payroll burden has squeezed out development budgets. Counties allocated just Sh123.76 billion to development projects, representing 26 percent of expenditure—falling short of the minimum 30 percent legal requirement.
Twenty-three counties missed the threshold, with Nairobi (12 percent), Machakos (16 percent), and Kisumu (17 percent) among the worst performers.
The report also flagged widespread reliance on manual payroll systems, with Sh10.7 billion processed outside automated platforms.
Counties such as Garissa, Meru, Wajir, and Tharaka Nithi were cited for continuing manual practices, exposing them to risks of ghost workers and payroll manipulation.
Nyakang’o warned that starting with the 2025/26 financial year, her office will no longer approve salary requests processed outside automated systems.
Counties were required to submit action plans by June 2024 to bring their wage bill in line with the 35 percent ceiling by 2028, but several—including Turkana, Bomet, Kajiado, and Lamu—have yet to comply.
With payrolls ballooning and development shrinking, the report renews debate on whether counties are living up to the promise of devolution—or simply becoming expensive employment bureaus.
