The National Treasury issued a sweeping circular directing all government institutions and county administrations to urgently identify, utilize, and commercialize idle and underperforming public assets in a bid to enhance efficiency, cut wasteful expenditure, and strengthen fiscal sustainability.
In the directive signed by Treasury Cabinet Secretary John Mbadi dated February 12, 2026, ministries, departments, agencies (MDAs), and county governments have been given 90 days to submit detailed reports on underutilized assets and plans to optimize their use.
The Treasury said recent assessments revealed widespread inefficiencies across the public sector, including idle land, underused buildings, duplicated facilities, and weak maintenance systems. These gaps have contributed to rising recurrent expenditure and increased pressure on public finances.
The circular warns that failure to fully utilize government assets undermines ongoing fiscal consolidation efforts and broader public financial management reforms.
A key pillar of the directive is the commercialization of public assets—particularly land, buildings, and infrastructure—to unlock revenue streams without relinquishing government ownership.
Accounting officers have been instructed to identify all idle or underutilized public land, conduct formal valuations using government-registered valuers and explore revenue-generating options such as leasing, joint ventures, and Public-Private Partnerships (PPPs).
All such initiatives must comply with procurement laws and secure approvals from relevant authorities, including the National Land Commission where applicable.
In a move expected to significantly cut government spending, the Treasurybanned public institutions from renting office space where unused government buildings exist.
Institutions must now justify any leasing arrangements and obtain prior approval from the State Department of Housing and Urban Development.
The directive also calls for rationalization of office space to eliminate waste, co-location of agencies to reduce duplication and increased sharing of government facilities, especially in urban areas.
Government agencies managing roads and transport infrastructure have been directed to commercialize road corridors and wayleaves through utility installations, outdoor advertising, service concessions and PPPs, tolling frameworks and smart corridor and digital infrastructure.
The Treasury said these measures could unlock significant non-tax revenue if implemented effectively.
Focus on Rail, Fleet, and Training Facilities
The circular also targets other sectors with high potential for optimization.
On railways there should be commercial use of stations, land, and freight/passenger services through concessions while on government fleet, there should be introduction of pooled transport systems, reduced idle vehicles, and data-driven procurement.
On training and conference facilities, there should be leasing, event hosting, and management contracts.
In a notable shift, government vehicle maintenance will prioritize institutions such as technical training centers and polytechnics within a 40-kilometre radius, where capacity exists.
Unserviceable vehicles may also be transferred to training institutions as learning tools.
All Principal Secretaries and Accounting Officers are required to integrate asset utilization strategies into formal Asset Management Plans, submit compliance and progress reports within 90 days and maintain updated asset registers and revenue tracking systems
The Treasury emphasized that strict adherence to the circular will be monitored closely, warning that non-compliance could attract administrative sanctions.
The directive is anchored in key legal frameworks, including the Constitution, the Public Finance Management Act, and the Public Procurement and Asset Disposal Act, as well as international accounting standards.
Analysts say the move signals a stronger shift by the government toward maximizing existing resources instead of relying heavily on new borrowing or taxation.
If fully implemented, the policy could significantly improve service delivery while easing pressure on Kenya’s strained public finances.
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