Nairobi County sits on an estimated KSh 60 billion in uncollected revenue every year, Nairobi Governor Johnson Sakaja has revealed, as he warns that the city’s historic gains in revenue will remain limited unless compliance with Nairobi land rates is significantly improved.
Nairobi Land Rates Key to Unlocking the City’s Financial Potential
While addressing the Senate County Public Accounts Committee last Friday, November 28, Governor Sakaja noted that despite the improvements brought by the Nairobi Pay digital platform, the county was still tapping only a fraction of its real financial potential.
According to Sakaja, the city currently collects land rates from only 50,000 of the 250,000 parcels of land, leaving 200,000 properties outside the revenue bracket.
“If we improve compliance, Nairobi could multiply its revenue base and accelerate development projects that have been delayed for years,” he said.
The Governor of Kiambu emphasised the newly enacted National Rating Act as a key instrument in addressing long-standing revenue shortfalls, by modernising property valuation, increasing rateable properties, and making counties better equipped with enforcement powers.
According to the Act, land rate defaulters risk facing a 60-day notice, financial penalties, restricted access to county services, legal action, or property auctions in extreme cases. Sakaja said that the measures are aimed at ensuring the elimination of loopholes that have been used by some property owners to evade paying land rates in Nairobi for decades.
“The law modernises valuations, clarifies who must pay rates, and gives counties the tools to enforce compliance,” he explained.
Digital Platforms and Reforms Driving Growth
The Nairobi Pay system, developed by the Ministry of ICT and introduced by the former Nairobi Metropolitan Services, was also defended by Governor Sakaja. The platform has helped the city increase its own-source revenue from KSh 10.8 billion to KSh 13.8 billion in just three years, the highest revenue performance since devolution.
He noted that merging the issuance of business permits into the Unified Business Permit has simplified licensing and brought KSh 3 billion more in revenue to the county.
Despite these gains, Sakaja still emphasized that full implementation of the Rating Act was the critical missing piece. This would correct many anomalies and make the system fairer, such as where bungalows and apartment complexes with huge differences in land size pay similar rates, and expand the city’s revenue base.
The Governor also confirmed that Nairobi has started regularising unauthorized developments to increase safety, ensure structural integrity, and enhance compliance with Nairobi land rates.
Senators, however, pressed the county to address high transaction fees charged by commercial banks, which they said burden residents paying for county services. With Nairobi’s digitisation of payments almost complete, Sakaja said the next frontier is going to be the strict enforcement of Nairobi land rates, which he believes will transform the county’s financial future and set it on the path of sustainable development.
