Sakaja: Ministries Owe Nairobi Ksh2.7B in Unpaid Land Rates

Nairobi County is seeking to recover Ksh 2.7 billion in unpaid land rates from national government ministries as City Hall steps up efforts to increase its own-source revenue.

Governor Johnson Sakaja disclosed the amount while appearing before the Senate County Public Investments and Special Funds Committee, where he explained the county’s efforts to collect outstanding revenue.

Sakaja said the Ksh 2.7 billion owed by ministries was separate from arrears accumulated by other government institutions. He said police stations, prisons and military barracks were also among public institutions with large outstanding land rates.

The governor said Nairobi had written to several ministries over the unpaid bills but proposed negotiations between the two levels of government to resolve the issue.

“The conclusion of the matter is having a meeting with the Head of Public Service at State House, where we see how these monies can be paid, what we as the country owe them and what they owe us,” Sakaja told senators.

He said such discussions would help establish the amount owed by each side before a settlement is agreed.

Nairobi steps up revenue collection

The county government has been increasing pressure on property owners and institutions with long-running land rates arrears.

Sakaja said Nairobi has the potential to collect up to Ksh80 billion in own-source revenue if land rates and other charges are fully collected.

He said the additional revenue would give the county more resources to finance services and development without putting too much pressure on residents and small businesses.

Nairobi has also brought in six specialised debt recovery firms to pursue unpaid land rates. Each firm has been assigned to one of the capital’s six boroughs, with the companies expected to pursue old debts together with accumulated penalties and interest.

The recovery drive comes as the county seeks to improve compliance among property owners. City Hall has previously warned that persistent defaulters could face enforcement measures as it seeks to recover billions of shillings in arrears.

Sakaja also defended the Nairobi Revenue Authority, saying the agency had been legally established and had helped move revenue collection away from cash transactions.

He said the authority had digitised the collection of 125 revenue streams, making it possible for residents and businesses to complete several transactions online.

Among the changes is the single business permit system, which allows traders to apply, pay and print their permits without travelling to City Hall.

“There is no cash payment, and all these are under the NRA. We have been able to raise revenue from Ksh8 billion to Ksh15.4 billion in four years,” Sakaja said.

The governor also pointed to the National Rating Act, 2024, as another tool that could help counties improve property rate collection.

The law, which was assented to in December 2024, provides a framework for counties to manage and collect land rates from property owners.

Senate committee chair Johnes Mwaruma said the relevant government institutions should be brought before the committee to address the unpaid rates and work towards a lasting solution.

Sakaja said Nairobi’s revenue system could not continue depending heavily on payments from small traders while large property owners and government institutions accumulated huge arrears.

“For this city to be in the same place as Paris, we need to pay what is needed to the county in land rates. For long, we have been carried on the shoulders of mama mboga,” he said.

The county now hopes that stronger enforcement, digital revenue systems and negotiations with government institutions will help recover billions of shillings in outstanding payments and expand the funds available for services and development in Nairobi.