NAIROBI, Kenya – Nairobi County is facing a mounting legal debt crisis, with four advocates owed a staggering Sh6.3 billion — nearly a third of its total pending legal fees.
The latest report by Auditor General Nancy Gathungu shows the figure represents 29% of the county’s Sh21.4 billion pending legal bills, which in turn make up 11% of its overall unpaid bills.
Many of the claims stem from unpaid contractors, unprocedural staff terminations, irregular procurement, and poor contract management.
“The judgments entered against the County Executive resulted in a high cost of litigation and interests,” the report states, warning that the county has yet to fully disclose all legal liabilities, some dating back to the 1980s.
As of the audit, Nairobi was battling 1,086 active court cases. If these contingent liabilities are realised, the Auditor General warns, they could cripple the county’s finances and disrupt essential services.
Concentration of Cases
The report raises red flags over case allocation, noting that just eight lawyers were handling 65 cases between them, while the county has 350 prequalified advocates.
No explanation was provided for the selective distribution.
The audit also revealed that the county paid Sh180.7 million in interest and penalties to a contractor over a garbage collection dispute.
The case arose after Nairobi failed to pay Sh358.8 million for services provided between 2018 and 2022.
The contractor had billed Sh948.9 million, of which the county paid Sh590.1 million. Interest was charged at 12% per year, following a High Court ruling in December 2023.
Separately, the county paid Sh24.3 million to 13 unlawfully dismissed employees — plus Sh10 million in interest due to delayed settlement.
“These costs would have been avoided had management put in place measures to ensure prompt payments of pending bills,” the Auditor General noted, adding that Nairobi still lacks a payment plan to prevent further penalties.
The report questions the “regularity and value for money” of interest and penalties totalling Sh190.8 million from delayed payments.
