- Hillary Muhalya argues that rising county personnel costs are squeezing funds meant for development and essential public services.
- He notes that Homa Bay and Taita Taveta spent 63 per cent of ordinary revenue on personnel, while Machakos spent 58 per cent.
- Hillary maintains that counties need stronger payroll controls, better revenue collection and disciplined recruitment to restore fiscal balance.
Kenya’s devolved governments are facing a growing expenditure imbalance, with a significant share of county revenue being consumed by salaries and other personnel costs at the expense of development.
The latest figures from the Salaries and Remuneration Commission (SRC) have brought the problem into sharp focus, with Homa Bay and Taita Taveta emerging among counties where personnel expenditure has reached exceptionally high levels.
Both counties spent 63 per cent of their ordinary revenue on personnel emoluments, while Machakos spent 58 per cent.
The figures are particularly significant because Kenya’s public finance framework requires county governments to keep expenditure on wages and benefits at no more than 35 per cent of total revenue. Recent SRC reporting similarly treats 35 per cent as the applicable county wage-bill threshold.
The gap between the statutory ceiling and actual expenditure raises fundamental questions about the financial sustainability of some county governments and their capacity to finance development.
When more than half of a county’s ordinary revenue is absorbed by salaries, the amount available for roads, water projects, healthcare infrastructure, markets, agricultural programmes and other development initiatives inevitably becomes constrained.
The problem becomes even more pronounced when other recurrent expenses are added to the salary bill.
Counties must also finance fuel, office operations, utilities, vehicle maintenance, supplies, travel and other administrative requirements. These costs compete directly with development expenditure for the same limited pool of resources.
The SRC’s latest assessment shows that county personnel expenditure reached Sh171.36 billion, up from Sh154.94 billion during a comparable period in the previous financial year.
That represents an increase of approximately Sh16.42 billion.
Although the ratio of personnel expenditure to ordinary revenue declined from 46.8 per cent to 44.12 per cent, the overall wage bill continues to exert considerable pressure on county finances.
The improvement in the ratio was partly supported by increased revenue collection. However, the fact that the average ratio remained well above the 35 per cent threshold shows that the underlying problem has not disappeared.
High wage bills threaten development
There is an important distinction between having a large public workforce and having an unsustainable wage bill.
County governments require competent workers to deliver healthcare, agriculture, water services, local administration and other functions assigned to them under devolution.
The concern arises when the cost of maintaining that workforce grows faster than the county’s ability to raise and receive revenue.
In such circumstances, counties can find themselves trapped in a cycle where an increasing proportion of their resources is required simply to maintain the existing workforce, leaving insufficient funds to expand infrastructure and improve the economic base that could generate additional revenue.
The situation is not uniform across the country.
SRC reported that Tana River, Kwale, Nakuru and Uasin Gishu managed to keep their wage-bill-to-revenue ratios below the 35 per cent threshold during the first nine months of the 2025/26 financial year. SRC figures also place Kirinyaga below the threshold at 32 per cent.
This demonstrates that the wage-bill challenge is partly a question of how individual counties manage staffing, revenue collection and expenditure priorities.
At the national level, the pressure is equally significant.
Kenya’s overall public-service wage bill is projected to rise from Sh1.247 trillion in 2024/25 to Sh1.287 trillion in 2025/26.
The SRC has attributed part of the increase to expansion in the teaching, health and security sectors, together with periodic salary adjustments.
The number of public-service workers has also grown substantially, reaching about 1.07 million in 2025, compared with 884,700 in 2020.
The Teachers Service Commission remains the largest public employer, with its workforce rising from about 410,700 in 2024 to 436,300 in 2025.
The growth of the public workforce is not necessarily negative. Kenya needs teachers, doctors, nurses, administrators, engineers and other professionals to deliver essential services.
The bigger question is whether government employment is expanding at a pace that public revenues can sustainably support.
For counties, this question is becoming increasingly urgent.
Development spending is critical because it creates infrastructure and services that can stimulate economic activity. Roads improve access to markets. Water projects support households and agriculture. Modern health facilities improve service delivery. Markets and other infrastructure can expand local economic activity and strengthen revenue collection.
If development expenditure is consistently squeezed by recurrent costs, counties risk spending heavily today without investing enough in the infrastructure needed to generate better outcomes tomorrow.
What is driving the expenditure imbalance?
Several factors can explain the pressure.
Large county workforces mean salaries, allowances, pensions and other employment-related expenses consume a substantial share of revenue.
Counties also inherited major responsibilities, particularly healthcare, agriculture, water and local infrastructure, and delivering these services requires permanent staff.
Promotions, salary reviews, collective bargaining agreements and cost-of-living adjustments can increase personnel expenditure even when revenue growth is slower.
Weak own-source revenue compounds the problem. Some counties collect less revenue than their economic potential allows. Weak collection from markets, parking, business permits, property rates and other sources makes the wage bill appear even larger relative to available revenue.
Salaries are also only part of recurrent expenditure. Fuel, utilities, maintenance, travel, supplies and administration further reduce the resources available for development.
Political pressure can contribute too. County governments may face demands to create jobs and maintain staffing levels. Without strict workforce planning, employment costs can gradually become difficult to sustain.
Counties also have different populations, economies and revenue bases. A wage bill that is manageable in a stronger local economy may consume a much larger proportion of revenue in a county with limited economic activity.
Citizens, meanwhile, increasingly expect county governments to provide better healthcare, roads, water, markets, agricultural support and other services.
Perhaps the central problem is simple: where salaries and recurrent expenditure grow faster than ordinary revenue, development spending gets squeezed.
Counties need stronger fiscal discipline
The wage-bill problem is serious, but it is not impossible to reverse.
Counties can restore financial discipline without undermining essential public services if they are prepared to make difficult decisions.
The first step should be to treat the 35 per cent personnel-expenditure ceiling as a serious fiscal discipline measure rather than a target that can routinely be exceeded.
Counties operating above the threshold should develop credible, time-bound plans for bringing their wage bills down.
Every county should also undertake comprehensive payroll audits to establish exactly who is on its payroll, what job each employee performs, where they are deployed and whether the position is genuinely required.
Ghost workers, duplicate records, irregular payments and employees drawing improper multiple benefits must be eliminated.
Counties with excessive wage bills should consider freezing non-essential recruitment until personnel expenditure returns to more sustainable levels.
Replacement of essential health, technical and frontline workers should continue where justified, but recruitment should be based on demonstrable service needs rather than political pressure.
Proper workforce planning is equally important.
Some departments may have staffing shortages while others have more employees than their workloads require. Redeployment, retraining and rationalisation should therefore be considered before new employees are hired.
Strengthening own-source revenue is another critical part of the solution.
Increasing revenue does not necessarily mean introducing more taxes.
Counties should first close existing collection loopholes, digitise revenue systems, eliminate leakages and improve compliance.
Better collection from parking, markets, business permits, property rates and other legitimate revenue streams can increase fiscal space without necessarily increasing tax rates.
Development expenditure must also be protected.
Projects should be prioritised according to their economic and social impact rather than political visibility.
Non-essential travel, excessive workshops, unnecessary meetings, vehicle costs and other administrative expenses should also come under tighter scrutiny.
Every shilling saved from avoidable expenditure is a shilling that can be redirected to frontline services and development.
County assemblies have an important oversight role.
Approval of budgets should be accompanied by clear questions about staffing levels, payroll growth, allowances, pending obligations and the percentage of revenue going to personnel costs.
Oversight should focus on value for money rather than political rivalry.
New positions should be created only where counties can demonstrate a clear service-delivery gap.
The test should be simple: What problem will this employee solve, and can the county sustainably afford the position?
In the long term, the most sustainable way of improving the wage-bill ratio is to grow the revenue base.
Counties should invest strategically in agriculture, tourism, trade, markets, manufacturing, urban development and other sectors capable of expanding economic activity.
A larger economy can eventually generate more legitimate county revenue, making existing public-service costs easier to sustain.
Citizens should also be able to see clearly how much their county collects, how much it spends on salaries, how much goes into development and what projects have actually been completed.
Transparency creates pressure for better financial management.
Kenya does not need county governments that simply employ more people. It needs county governments that employ the right people, pay them properly and deploy them where citizens need their services most.
The purpose of devolution was never simply to create bureaucracies. It was to bring resources, services and development closer to the people.
That promise becomes difficult to fulfil when salaries consume an excessive share of county revenue.
The answer is therefore neither indiscriminate layoffs nor endless recruitment.
It is discipline, accountability, better payroll management, stronger revenue collection, careful recruitment and ruthless prioritisation of development spending.
County governments must restore the balance between paying people and building the future.
A county that spends almost all its resources maintaining its workforce may remain operational, but it risks losing the capacity to transform the lives of the people it was created to serve.
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The time has come for county governments to move from simply managing wage bills to actively managing the future of devolution itself.
By Hillary Muhalya
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