Nairobi County is sitting on an estimated KSh 60 billion in uncollected revenue every year, Nairobi Governor Johnson Sakaja has revealed, warning 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
Speaking before the Senate County Public Accounts Committee on Friday, November 28, Governor Sakaja said that despite the improvements brought by the Nairobi Pay digital platform, the county is still tapping only a fraction of its real financial potential.
According to Sakaja, the city currently collects land rates from just 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 highlighted the newly enacted National Rating Act as a pivotal tool to correct long-standing revenue gaps. The law modernises property valuation, broadens the number of rateable properties, and equips counties with stronger enforcement powers.
Under the Act, land rate defaulters can face a 60-day notice, financial penalties, restricted access to county services, legal action, or, in extreme cases, property auctions. Sakaja said these measures are designed to close loopholes that have allowed some property owners to avoid paying Nairobi land rates 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
Governor Sakaja also defended the city Pay system, developed by the Ministry of ICT and introduced by the former Nairobi Metropolitan Services. 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 business permits into the Unified Business Permit has simplified licensing and contributed an additional KSh 3 billion in county revenue.
Despite these gains, Sakaja stressed that full implementation of the Rating Act remains the critical missing piece. Correcting anomalies such as bungalows and apartment complexes paying similar rates despite large differences in land size would make the system fairer and expand the city’s revenue base.
The Governor also confirmed that the city has begun regularising unauthorised developments to enhance safety, ensure structural integrity, and boost 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 the city’s digitisation of payments largely complete, Sakaja said the next frontier is strict enforcement of Nairobi land rates, a move he believes could transform the county’s financial future and pave the way for sustainable development.
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