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County sagging under debt

Nairobi is trying to fight off Sh27 billion in contingent liabilities to keep the county debts in check.

According to a report by the Budget and Appropriation Committee, the county could be owing creditors up to Sh42 billion, inclusive of disputed amounts.

Some of the contested debts include Sh194 million owed to the National Social Security Fund (NSSF ), Sh3 billion to the Local Authorities Pension Trust (Laptrust) fund, Sh1 billion in litigations and Sh15 billion in foreign loans.

The county has also attracted huge penalties from retirement benefit schemes largely blamed on the defunct City Council of Nairobi.

NSSF’s penalties amount to Sh668 million, while Laptrust claims Sh1 billion. A similar amount is demanded by the Local Authorities Provident Fund (Lapfund).

City Hall executives say the debts arose from previous administrations spending more than they had.

They claim most of the money was used on a bloated workforce, leaving little for statutory payments like pensions and taxes.

However, according to the report, the county government has entered into arrangements with the agencies to pay.

Nairobi county has been dragging its feet in servicing its debts. Authorities have only allocated Sh2.4 billion to take care of the huge debt in the next Financial Year.

Another report by the Budget and Appropriation Committee on the supplementary budget advised City Hall to halt borrowing for the next few years.