CS Mbadi Calls For Fewer Counties To Ease Wage Bill Crisis

National Treasury Cabinet Secretary John Mbadi has warned that Kenya’s growing wage bill is unsustainable, suggesting that the country should either revert to the former provincial system or reduce the number of counties to a maximum of 14.

Speaking on Citizen TV’s JKLive on Wednesday night, Mbadi said the current devolved structure is straining public finances, with county governments spending a large portion of their budgets on salaries instead of development.

“Our counties are filled with unnecessary staff, from directors of fishermen, boda bodas, music, and culture, to deputies earning hefty salaries. Forty-seven counties are simply too many for a country of Kenya’s size,” he said.

According to Mbadi, governors have structured their administrations to mirror the national government, creating excessive bureaucracy and wasting public funds. He noted that devolution was meant to bring resources to the grassroots, but instead, it has led to an inefficient and costly system.

The Treasury boss revealed that the government spends Sh80 billion per month on salaries at the national level—amounting to nearly Sh1 trillion annually—while loan repayments stand at Sh1.1 trillion per year. With Kenya collecting only Sh2.5 trillion in revenue, he questioned how much remains for development.

“We have a very expensive government. Where do we get money for development when we are spending almost everything on salaries and debt repayment?” he asked.

To address the issue, Mbadi proposed reorganizing counties into fewer, more manageable regions. He pointed to Rift Valley and Eastern Province under the old system, suggesting they be split into two or three units instead of multiple counties.

He also raised concerns over over-representation in county assemblies, citing the high number of elected and nominated MCAs as an additional financial burden.

“Kenyans need to have a conversation about whether this is the kind of devolution we need. In my view, we needed resources to be devolved, not excessive government structures,” he said.

Debt Crisis and Borrowing Plans

Despite Kenya’s ballooning debt, which now stands at Sh11.2 trillion, Mbadi said the government has no plans to halt borrowing. Speaking before the Senate Finance and Budget Committee on Tuesday, he defended borrowing as necessary to sustain government operations.

Mombasa Senator Mohamed Faki pressed Mbadi to explain how the massive loans are being used, questioning why Kenya remains heavily indebted despite continuous borrowing.

“Kenyans are wondering why we are sinking deeper into debt while there are lingering questions about how these funds are being spent,” Faki said.

Mbadi admitted that trust in President William Ruto’s administration remains low, but he assured lawmakers that measures are in place to ensure prudent use of public resources.

“We are working around the clock to ensure borrowed funds are utilized effectively because, eventually, these debts must be repaid,” he said.

The government plans to borrow Sh684.2 billion from the domestic market and Sh146.8 billion externally to bridge the budget deficit for the financial year ending June 2026.

This shift comes as Kenya faces reduced funding from the International Monetary Fund (IMF), with external borrowing targets for the year ending June 2025 already revised downward to Sh168 billion.

At the same time, the Kenya Revenue Authority (KRA) is under pressure to collect Sh1.07 trillion between March and June 2025—an average of Sh267.8 billion per month—well above its current monthly collection rate of Sh175.46 billion.

Mbadi also raised concerns over a Sh42 billion loan taken by the Treasury on August 22, 2022, just days after the general election, questioning the urgency of the borrowing given the impending change of administration.

With Kenya’s debt-to-GDP ratio standing at 65.7 percent as of June 2024—well above the 55 percent sustainability threshold—Mbadi said the Auditor-General’s office has been engaged to help craft a debt reduction strategy.

“We have asked all ministries to redirect resources to priority areas to ensure efficient use of government funds, particularly loans. Currently, Sh1.3 trillion has been allocated but not yet disbursed,” he said.