City Hall has announced that it will be collecting Ksh829.6 billion owed by Nairobi residents in its new plan to offset over Ksh76 billion ballooning debts.
Penalties and interest owed to the Nairobi County government have accumulated to Ksh803 billion with over Ksh22 billion coming from other general debts.
According to the county's Finance executive Allan Igambi, the county has formed a debt collection unit whose mandate will be to pursue defaulters.
“The county government will now issue demand notices followed by enforcement upon expiry of the notices. If the county is able to collect the above account receivables, it will be easy to pay all debts,” said Finance executive Allan Igambi.
City Hall is owed approximately Ksh904 million for single business permits, Ksh644 million by sundry debtors and Ksh302.4 million in rent arrears from county houses tenants.
The county is also owed Ksh114 million from rental market stalls, Ksh268 million for advertisements and Ksh811 million from loading zones fees.
The County's debt has accumulated so much that it has resulted to focus on collecting its debts to pay up the debts inherited over three decades ago.
There are Ksh21.8 billion unverified debt from defunct Nairobi County Council money that was meant to fund water infrastructure projects in the 1970s and some government-guaranteed loans taken in the 1980s.
The county’s medium-term debt management strategy for 2021 also indicates that City Hall will issue a waiver on land rates.
Another Ksh55.1 billion comes from verified debts and another Ksh21.8 billion owed to suppliers.
Suppliers and contractors are owed Sh6.7 billion, up from Sh4.7 billion recorded in December 2019.
City Hall retired employees are owed Ksh173 million in benefits and ksh926 million in utilities.
According to Igambi, the debt portfolio worsened over the years due to failure to achieve revenue projections and high-compounded interests and penalties charged by statutory creditors
“With strained county revenues due to accrued interests and penalties, especially on statutory debts, the county’s debt has continued to grow,” said Igambi.
