County governments are increasingly spending a higher proportion of their budgets on paying salaries and allowances, raising alarm over dwindling funds for economic development projects and service delivery.
According to fresh data from all 47 devolved units, 46.8 percent of county spending, equivalent to KSh470.74 billion, went to personnel costs in the financial year ending June 2025. It is the highest percentage in three years, second only to the 47.4 percent achieved in 2022.
Although development expenditure rose slightly to 26.3 percent, translating to KSh123.76 billion, the marginal increase is not enough to offset the effects of rising wage bills, which continue to drain funds from key sectors such as healthcare, infrastructure, and education.
“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 stated in her latest county budget review.
Nyakang’o pointed out that the current wage burden ranks as the third-highest since devolution began, following peaks of 49.7 percent in 2018 and 47.4 percent in 2022.
The Public Finance Management Act (2023) has a provision where counties are supposed to use at least 30 percent of their budgets on development and cap salaries at no more than 35 percent, but most devolved units have never reached this mark consistently. Previously, counties reached the target only three times; 35 percent in 2015, 34 percent in 2016, and 32.4 percent in 2017.
Experts warn that low development spending threatens economic growth and job creation, especially in rural areas.
“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,” Nyakang’o urged.
The ballooning wage bill is tied to consistent staff recruitment, with the county workforce expanding by 10.7 percent from 204,600 in 2020 to 226,500 by June 2024, signaling a trend that continues to strain county finances.
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