NAIROBI, Kenya, Thursday, September 18, 2025 — Counties reduced their outstanding pending bills by three percent to Sh176.8 billion in the 2024/2025 financial year, down from Sh181.98 billion the previous year, according to new data from the Controller of Budget (CoB).

The latest County Governments Budget Implementation Review Report attributes the decline mainly to Nairobi County, which reconciled Sh39.76 billion during the period.

Despite the overall drop, many devolved units still carry significant arrears. Nairobi remains the worst-hit, with Sh86.77 billion in pending bills. It is followed by Kiambu County at Sh7.89 billion and Machakos County at Sh6.73 billion.

Some counties, however, posted very low pending bills. Elgeyo Marakwet reported only Sh12.14 million, while Lamu County stood at Sh32.11 million, showing sharp contrasts in financial management.

The CoB report also comes as Kenya grapples with ballooning national government arrears. Pending bills at the national level rose by Sh8.57 billion, reaching Sh524.84 billion in 2024/2025.

These debts include unpaid contractors, suppliers, pension obligations, and statutory deductions, which collectively amounted to Sh516.27 billion.

Earlier in June, Treasury Cabinet Secretary John Mbadi said the government had stepped up efforts to clear these debts. He revealed that Sh229 billion had been verified and recommended for payment after an extensive review.

While presenting the 2025/2026 Budget Estimates in Parliament, Mbadi explained that the Pending Bills Verification Committee had received 65,625 claims worth Sh571.6 billion.

Out of this amount, 57 percent — equal to Sh522 billion — had already been analyzed. The CS said the government would prioritize verified claims to restore trust with contractors and suppliers.

The variation in county figures highlights different approaches to fiscal discipline across devolved units. Financial analysts argue that some counties continue to delay payments despite budget allocations, worsening the cash flow crisis for suppliers.

A recent report by Sauce.co.ke showed that delayed payments have forced many small businesses to scale down operations.

As the government intensifies debt clearance efforts, all eyes will be on both the national and county administrations to deliver on their promises of fiscal accountability.