Nairobi Governor Sakaja Johnson has told senators that public institutions owe the county Sh2.7 billion in unpaid land rates, exposing a major gap in the capital’s revenue collection as the county seeks to finance services and infrastructure through its own income.
Sakaja made the disclosure while appearing before the Taita Taveta Senator Johnes Mwaruma-led Senate County Public Investments and Special Funds Committee (CPISFC) on Monday, and said that the arrears include money owed by police stations, prisons and military barracks.
The governor said the county had written several letters to the institutions involved but had yet to secure full payment.
The disclosure places the national government among the largest sources of unpaid revenue for a county that is itself expected to provide essential services to millions of residents.
Sakaja said Nairobi could raise as much as Sh80 billion in own-source revenue if land rates were collected fully, potentially giving the county significantly greater financial capacity to improve roads, drainage, waste management and other services.
The county has responded by stepping up enforcement.
The Nairobi Revenue Authority has appointed six specialised debt-recovery firms, with each firm assigned to one of the capital’s six boroughs.
Their mandate includes pursuing long-standing land-rates arrears, together with accumulated penalties and interest.
Sakaja defended the creation of the Nairobi Revenue Authority, saying it had been established within the law and had transformed the way the county collects revenue.
He said the authority had digitised 125 revenue streams and reduced the need for residents and businesses to make physical visits to City Hall.
“There is no cash payment, and all these are under the NRA. We have been able to raise revenue from Sh8 billion to Sh15.4 billion in four years,” Sakaja said.
The governor also cited the National Rating Act, 2024, which was assented to by President William Ruto in December 2024, as legislation that could provide a stronger framework for expanding Nairobi’s revenue base.
But the dispute over the Sh2.7 billion owed by national institutions presents a more complicated problem: the county is seeking aggressive enforcement against property owners while some government institutions remain indebted to the same administration.
Rather than pursue the matter solely through enforcement, Sakaja proposed negotiations with the national government to establish a comprehensive account of what each side owes the other.
“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, so that we have a well-discussed and agreed way of settling the matter,” Sakaja said.
Mwaruma said the Senate committee would need to bring the relevant institutions before it to confront the issue and work toward a lasting settlement of the outstanding rates.
The revenue dispute also highlighted a broader question over who carries the financial burden of running Nairobi.
Sakaja said ordinary traders and residents should not continue shouldering a disproportionate share of the cost of running the capital while large property owners and institutions accumulate unpaid bills.
“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,” Sakaja said.
His appearance before the Senate comes as Nairobi seeks to widen its revenue base and recover billions of shillings in unpaid rates.
The county is betting on digitisation, enforcement and improved compliance to increase collections.