The share of expenditure on salaries in county budgets rose to a three-year high in the 12 months to June 2025, highlighting the deepening struggles by the devolved units to free up cash for development projects.
An analysis of the expenditure by the 47 devolved units shows that 46.8 percent (Sh470.74 billion) of their budgets was spent on paying salaries and allowances in the year under review. The last time this share was higher was in the year to June 2022 at 47.4 percent.
The increase in the money used for personnel emoluments came in the year when the share of budgets for development projects was 26.3 percent or Sh123.76 billion. This was a rise from 24.4 percent the previous year.
A ballooning expenditure on salaries and allowances has derailed efforts to deliver critical projects like healthcare and roads, hurting service delivery by the devolved units.
“The expenditure landscape reveals excessive spending on employee compensation, with only eight counties staying within the 35 per cent regulatory ceiling,” Controller of Budget, Margaret Nyakang’o says in the latest review of spending by counties.
The 46.8 percent share of the total budget for counties that salaries and allowance took in the year ended June 2025 is the third highest since devolution started more than a decade ago. It was highest at 49.7 percent in the year to June 2018 and 47.4 percent four years later.
The Public Finance Management Act 2023 requires counties to spend at least 30 percent of their budgets on development projects and caps expenditure on salaries and allowances at 35 percent. The devolved governments have only adhered to this provision on the minimum spending for development projects three times.
Counties spent 35 percent of their budgets on development projects in the year to June 2015. This share then dropped to 34 percent the following year and further to 32.4 percent a year later.
High spending on development projects like the construction of roads is critical in improving infrastructure and creating casual jobs, and thus boosting the spending power in the rural economies.
“The Controller advises that County Governments formulate and implement strategies to increase their development budget expenditures and meet the 30 per cent threshold as required by law,” Dr Nyakang’o added.
Counties have, in the past few years, been on a hiring spree, which has triggered the steady jump in the share of the budget dedicated to the payment of salaries and allowances.
A separate report shows that counties had 226,500 employees as at June 2024, which was an increase of 10.7 percent from 204,600 in 2020.
Employee numbers at the counties have maintained a year-on-year rise in the past five years, with the Teachers Service Commission the only public entity that has surpassed counties in fresh hirings over the period.
