Revealed: How counties fail to convert budget allocations for development projects

A recent Agriculture and Food Systems Transformation Summit 2026 provided a platform for National and County Governments to take stock of progress and forge a shared, actionable delivery compact towards food sovereignty, job creation and shared prosperity under BETA. [PCS]

Several counties are failing to convert budget allocations into tap development projects that improve residents’ lives, with Nyandarua and Machakos performing worst.

According to the County Development Index Report 2026, Nyandarua County executed only 42.1 per cent of its budget and Machakos County 46.5 per cent.

The two counties highlighted the challenges counties face in managing public finances and achieving development objectives.

Mandera, Nyamira, Bungoma and Kajiado also recorded budget execution rates of below 60 per cent.

Mandera managed 50.8 per cent, Nyamira (53.8 per cent), Bungoma (55.8 per cent), and Kajiado (56.1 per cent).

More than a decade since devolution, the report paints a picture of challenges in absorbing resources for development and improving the lives of Kenyans.

The report further exposes how counties juggle resources between development projects and recurrent expenditure.

Kilifi allocated the highest proportion of its budget to development expenditure at 42.1 per cent, followed by Trans Nzoia (36.3 per cent), Siaya (35.6 per cent) and Marsabit (34.9 per cent).

Nairobi allocated just 12.2 per cent of its budget to development expenditure. Machakos (16.5 per cent), Kisumu (16.6 per cent) and Kiambu (17.9 per cent).

The low development funds allocation in these counties suggests that a substantial portion of their budgets is committed to recurrent spending, potentially leaving no financial opportunities for new infrastructure and other long-term investments.

Nairobi County stands out particularly due to the scale of public service demands in the capital city, where pressure on roads, drainage, sanitation, healthcare and other essential services requires sustained investment.

However, the report cautions that a high development allocation does not automatically mean that projects have been completed, and that a high-budget execution rate does not establish the quality or impact of the spending.

On the other hand, several devolved units recorded high execution rates. Garissa, Kirinyaga, Lamu, Murang’a, Nandi, Nyeri, Samburu, Turkana, Vihiga and Wajir each recorded a budget execution rate of 100 per cent, while Embu achieved 99.5 per cent.

However, the report indicates that spending the entire budget does not necessarily mean a county is investing more in development, adding that county performance depends on more than how much of the budget is spent but also how much goes to development, salaries and own revenue collected.

Based on revenue collected, budget implementation and financial management, Narok was ranked the highest in fiscal management, followed by Mombasa, Nyeri, Kirinyaga and Lamu.

Nyamira recorded the lowest fiscal management, followed by Kisii, Kajiado, Mandera, Bungoma, Machakos and Nyandarua.

The report shows how salaries put pressure on county finances, with Kisii recording the highest wage bill burden accounting for 61.8 per cent of revenue, followed by Nyamira at 53.9 per cent.

An ultra mordern inpatient unit at Rift Valley Provincial Hospital under construction. [File, Standard]

Nairobi allocated 46.5 per cent of its revenues to paying employees’ salaries, while Mandera spent 35.5 per cent and Marsabit 35.3 per cent.

“Such high-wage bill burdens leave counties with less fiscal space for development programmes and other competing demands, including infrastructure, healthcare, water and sanitation,” reads the report.

Some counties with high wage bills also struggled to implement planned spending, with Nyamira suffering the pressure of a wage bill burden of 53.9 per cent, budget execution of 53.8 per cent and the lowest fiscal management score.

Despite Nairobi being a major economic hub with significant revenue-generating potential, it allocated only 12.2 per cent of its budget to development and devoted 46.5 per cent of its revenues to personnel costs.

The counties that recorded lower wage bill burdens were Kiambu, recording 6.8 per cent, Machakos (12.8 per cent), Busia (16.9 per cent), Mombasa 17 per cent and Kitui 17.1 per cent.

On revenue collection, Narok recorded the highest own-source revenue mobilisation per capita (per person) at Sh4,800, followed by Mombasa (Sh4,200). Nairobi collected Sh2,500, Nyeri (Sh2,100), while Nakuru, Kiambu and Laikipia each recorded Sh1,600.

On the contrary, Tana River collected just Sh100 per capita, Mandera (Sh134), Wajir (Sh180), while Marsabit and West Pokot recorded Sh200 each. Garissa collected Sh240.

The report indicates that the counties with low own-source revenue remain heavily dependent on transfers from the national government.

“Counties with diversified economies, higher shares of manufacturing and services, stronger labour markets and lower poverty consistently outperformed counties whose economies remain predominantly dependent on subsistence agriculture and pastoral livelihood,” reads the report.

However, the report emphasises that the devolved units have varying economic bases, population patterns and revenue-generating opportunities, meaning that their capacity to raise local revenue differs.

“The fiscal management and public finance analysis demonstrates substantial variation in counties’ capacity to mobilise own-source revenue, manage expenditure and sustain development investments.”

“Counties with stronger and more diversified economic bases are generally better positioned to generate own-source revenue and finance county priorities, while many arid and semi-arid lands, and rural counties remain heavily dependent on transfers from the national government,” reads the report.

To solve the low collection, the report suggests improving revenue administration, strengthening collection systems and reducing leakages, expanding and modernising own-source revenue systems.

On human capital development, including access to health, education and skills development. Nairobi, Kiambu, Nyeri, Mombasa, Murang’a, Nakuru, Meru, Machakos, Nyandarua, Kirinyaga and Uasin Gishu are among the strongest performers, with high skilled birth attendance, relatively low child mortality, strong literacy outcomes and higher participation in technical and vocational education.

Nairobi, for example, records a skilled birth attendance rate of 99 per cent. under-five mortality rate of 22 per 1,000 live births and an adult literacy rate of 94 per cent.