Nairobi Governor Johnson Sakaja now says Nairobi is sitting on KSh 60 billion in uncollected revenue every year, warning that the city's historic revenue gains will remain a fraction of their potential unless land rate compliance is improved.
Speaking before the Senate County Public Accounts Committee on Friday, November 28, Sakaja said that despite Nairobi Pay significantly improving collections, the county is still only tapping a small portion of its real financial base.
According to the Governor, Nairobi currently collects land rates from just 50,000 of the city's 250,000 parcels, leaving 200,000 properties outside the revenue bracket.
"If this happens, the capital could multiply its revenue base and unlock development that has been delayed for years," he stated.
Sakaja said the newly enacted National Rating Act provides the strongest opportunity yet to correct this imbalance. The law modernises valuation, expands the number of rateable properties, and grants counties more powerful enforcement tools.
Under the Act, land rate defaulters can receive a 60-day notice, face penalties, lose access to county services, be subjected to legal action, or, in extreme cases, have their property auctioned. Sakaja said these measures will help counties seal long-standing loopholes that have allowed property owners to avoid paying rates for decades.
"The law modernises valuation and broadens who is required to pay rates and gives counties stronger enforcement powers," Sakaja noted.
The Governor also defended the Nairobi Pay digital revenue platform, which he credited for the city's record performance.
He said the system, developed by the Ministry of ICT and introduced by the defunct Nairobi Metropolitan Services, has raised Nairobi's own-source revenue from KSh 10.8 billion to KSh 13.8 billion in three years, the highest since devolution.
He added that merging business permits into the Unified Business Permit has simplified licensing and contributed to the county's KSh 3 billion revenue growth.
Sakaja insisted that despite this progress, full implementation of the Rating Act remains the missing link to unlocking Nairobi's hidden billions. He said that correcting distortions, such as bungalows and apartments paying similar rates despite vast land differences, will make the system fair and broaden the revenue base.
The Governor informed senators that Nairobi has also begun regularising unauthorised developments to improve safety, ensure structural integrity, and expand compliance.
Senators, however, asked the county to address exorbitant transaction fees charged by commercial banks, which they said place an unfair burden on residents paying for county services.
With Nairobi's digitisation of payments now largely complete, Sakaja said the next frontier is enforcing land rates, a move he insists could transform the county's financial future.
