Nairobi — Nairobi City County has been ranked the country's worst-performing county in managing pending bills, with the Parliamentary Budget Office (PBO) warning that its growing debt burden points to weaknesses in budget execution and financial management.
The findings are contained in the County Fiscal Performance Measurement Index (CFPMI), which assessed all 47 counties using seven indicators, including budget implementation, development expenditure, own-source revenue, wage expenditure, pending obligations, county assembly expenditure ceilings and audit outcomes.
According to the report, Nairobi remained the poorest-performing county in managing pending obligations in both the 2023/24 and 2024/25 financial years, receiving an "E" grade after recording a CFPMI score of virtually zero.
"Nairobi City County having pending bills far exceeding three times its total annual revenue, it represents the most extreme case of fiscal insolvency among all counties," the report states.
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The PBO said the county's pending bills could affect service delivery and payments to suppliers and contractors.
"This implies a backlog of unpaid bills that could paralyze service delivery, discourage suppliers from future contracts, and undermine public trust in governance," the report says.
Nairobi accounts for more than 40 percent of all pending bills owed by county governments, according to the report, which linked the high level of arrears to weaknesses in budget execution and debt management.
The report found no improvement in Nairobi's fiscal performance in 2024/25, with the county retaining a CFPMI score of 0.000 and an "E" grade.
The findings come amid concerns over the size of pending bills across counties. The Controller of Budget's Annual County Governments Budget Implementation Review Report for the 2024/25 financial year showed that total county pending bills declined to Sh176.8 billion from Sh182.46 billion in the previous financial year.
Nairobi had the largest stock of pending bills at Sh86.77 billion, accounting for nearly half of all outstanding county arrears. The bills were largely owed to suppliers, contractors and other service providers.
Nationally, the PBO report found that counties continue to struggle with pending obligations despite improvements in some areas of public financial management.
The average score for managing pending bills remained at about 0.34 in 2024/25, with 97.8 percent of counties falling within the lower performance grades.
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The report attributed the weak performance to challenges in expenditure control, cash-flow management and clearing arrears, and called for stronger commitment controls, verification of pending bills and prioritisation of payments.
This version removes the promotional/interpretive language and keeps the story centred on the PBO findings, figures and implications.
