NAIROBI, Kenya — The National Treasury has directed all Principal Secretaries and accounting officers to identify, value, and commercialise idle or underutilised public assets, in a sweeping policy shift aimed at tightening fiscal discipline and improving efficiency.
In Treasury Circular No. 3 of 2026, signed by Cabinet Secretary John Mbadi, the government flagged widespread inefficiencies in asset management, including idle land, underused buildings, duplication, and weak maintenance practices across Ministries, Departments, and Agencies (MDAs).
The circular, issued on February 12, is anchored in constitutional and statutory provisions, including Articles 201 and 227 of the Constitution, the Public Finance Management Act, and the Public Procurement and Asset Disposal Act.
It compels public entities at both national and county levels to ensure assets deliver value for money and support fiscal sustainability.
At the core of the directive is a mandatory audit of public land. Principal Secretaries must identify and document all idle or underutilised land under their control, backed by valid ownership records and updated asset registers.
The land must then undergo independent valuation by registered government valuers.
Following valuation, institutions are required to explore commercialisation options such as leasing, public-private partnerships (PPPs), joint ventures, licensing, and development rights—subject to planning approvals and regulatory compliance.
All such initiatives must meet procurement rules and, where applicable, secure approvals from the National Land Commission.
The Treasury has also imposed strict reporting timelines. Ministries and agencies must submit detailed reports within 90 days, outlining identified assets, proposed commercial models, and implementation timelines.
Beyond land, the circular introduces measures to optimise government buildings. Public institutions are barred from leasing office space where unused government facilities exist, unless justified and approved by the State Department of Housing.
It also directs agencies to rationalise office space, promote shared use of buildings, and prioritise ownership over long-term leasing.
Government residential housing must now be aligned with market-based rent, subject to periodic review, while co-location of agencies is encouraged to cut operational costs.
In infrastructure, the Treasury has opened the door for commercial use of road corridors and railway assets. Agencies are instructed to explore revenue streams such as way-leaves, advertising, tolling, concessions, and smart corridor infrastructure—provided safety and planning standards are upheld.
Railway assets, in particular, may be commercialised through passenger and freight concessions, leasing of stations and land, and tourism services, while ownership remains with the state.
The circular also targets inefficiencies in government transport and logistics. It directs institutions to adopt fleet pooling, reduce idle vehicles, and make data-driven procurement decisions.
Notably, it prioritises the use of public technical institutions for vehicle maintenance and allows the transfer of obsolete vehicles to training institutions.
The Treasury emphasised that compliance is mandatory, warning that strict adherence will be key to strengthening public financial management and safeguarding taxpayer-funded assets.
