Counties only met three percent of their budgeted development expenditure in the first three months of the current financial year, new disclosures show, signalling the cash pressure facing the devolved units.
Data by the Controller of Budget (CoB) office shows that the Sh6.7 billion that the 47 devolved units collectively spent on development activities was just three percent of the Sh205.3 billion in their development budget for the fiscal year to June 2025—marking a funding shortfall of Sh44.6 billion during the three months.
The shortfall is expected to create more pressure for the counties to deliver on development projects, even as they face funding delays from the National Treasury while their own revenue collection remained below target.
“During the reporting period, the county government’s development expenditure amounted to Sh6.71 billion, translating to an absorption rate of three percent of the annual development budget of Sh205.33 billion. This represented a decline from the four percent absorption rate realised in a similar financial year 2023/24 period when the county governments’ cumulative expenditure on development activities was Sh6.92 billion,” the CoB reported.
The law requires that at least 30 percent of county governments’ budgets must be allocated to development expenditures, a requirement that has been largely breached during the first quarter when the Sh6.7 billion put into development by the counties accounted for just 12 percent of the total Sh55.7 billion spending by counties.
The poor spending by counties on development activities was witnessed as the Treasury sustained a trend of delays in disbursing equitable share revenues to the devolved units, risking halting their operations in recent weeks.
The CoB noted that during the three months to the end of September, the Treasury disbursed Sh32.7 billion out of the Sh380 billion budget for the fiscal year. This means that the Treasury failed to remit Sh62 billion to the counties in time, affecting their budget implementation.
Treasury delays
In total, counties have a Sh576.7 billion budget during the 2024/25 fiscal year, but spent just about 10 percent of the amount (Sh55.7 billion) during the first three months, a drop from a similar quarter last year when counties spent Sh67.5 billion.
This left them with pressure to spend Sh521 billion over the remaining nine months to the end of June 2025, a target that could not be achieved should Treasury delays and underperformance of own revenues persist.
The CoB also raised concerns as 10 counties failed to report any spending on development activities during the quarter. The counties are Baringo, Elgeyo-Marakwet, Kajiado, Kisii, Lamu, Nairobi City, Nyandarua, Tana River, Uasin Gishu and West Pokot.
“County Governments must prioritise development expenditure to meet the statutory requirement that at least 30 percent of the budget be allocated to development activities, in line with the Public Finance Management (PFM) Act, 2012. Robust project planning, monitoring, and implementation mechanisms should be adopted to improve the absorption rate of development funds to enhance the country’s development,” Dr Nyakango stated.
Counties that reported high spending on development programmes during the quarter included Kirinyaga which allocated 39 percent of its spending to development, Trans Nzoia (35.7 percent), Siaya (30.3 percent), Kericho (27.5 percent), and Garissa (27.2 percent).
Counties also recorded a drop in spending on recurrent activities during the quarter, with just Sh48.9 billion spent over the three months, compared to Sh60 billion during a similar quarter last year.
However, while counties’ total spending for development and recurrent activities during the three months was Sh55.7 billion, the COB reported that a total of Sh87.9 billion was available to the counties during the period, meaning that at the end of September, Sh32 billion remained unspent.
The funds available to counties included the Sh32.7 billion equitable share disbursements by the Treasury, Sh30.8 billion equitable share arrears from the previous fiscal year that were released by the Treasury during the quarter, Sh12.7 billion own-source revenues and Sh11.6 billion cash balances brought forward from 2023/24.
