Mbadi declares war on county pension debt crisis
Treasury Cabinet Secretary John Mbadi has sounded the alarm over mounting pension debts and fiscal inefficiencies in counties, warning that unless urgent reforms are adopted, service delivery and the welfare of public servants will be severely undermined.
Speaking on Friday, August 15, 2025, at the devolution conference in Homa Bay, Mbadi hailed devolution for bringing services closer to the people and opening new pathways for inclusive job creation and equitable development across all 47 counties.
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He noted that the devolved system has allowed previously marginalised areas to access “infrastructure, health services, education, and economic opportunities, narrowing the historical inequalities that have long hindered national operations.”
However, the CS stressed that prosperity can only be sustained if public finance management (PFM) reforms are implemented at both levels of government.
“When effectively managed, the Commission becomes an engine that not only drives economic expansion, but also ensures that prosperity is felt in every village, in every town, and every community across our nation,” he said.
Mbadi outlined ongoing reforms under the 2023–2028 PFM Reform Strategy, coordinated by the National Treasury’s PFM Reforms Secretariat. He called for county governments to comply with fiscal responsibility principles set out in the Public Finance Management Act, implement the national policy on enhancing county revenue, and roll out tariff and rating policies.
One of the most urgent appeals was to Parliament to fast-track the County Government Additional Allocation Bill, whose delays have become a perennial problem, leading to late disbursement, disruption of services, and low absorption of funds.
“Delays have also led to fiscal inefficiencies, resulting in additional costs in the form of commitment fees and foreign exchange charges,” Mbadi warned.
Call for accountability
He also urged counties to migrate to the Treasury Single Account by 2026, saying it would improve cash management at all government levels.
Counties should fully embrace e-procurement to foster accountability in the management of public finances. Transparency and accountability must be our shared character, because every shilling we manage is held in trust for the people,” he stated.
Mbadi revealed that pension debt owed by counties has ballooned from Ksh23.3 billion to more than Ksh103 billion over the years.
“To be honest here, this is criminal. If you are supposed to pay a salary to a staff member, and part of that salary is supposed to go to a pension, there is no rationality in paying half the salary and keeping the rest. It is not fair. It is unjust,” Mbadi said.
He warned that withholding pension contributions kills the future of retiring workers, stressing that all deductions must be remitted promptly.
“Money belongs to people who will one day retire, and when they retire, they want to go home with something,” he said.
The CS called on both county and national governments to verify and clear pension arrears to safeguard the social security of retirees.
“We must now start the culture of remitting all deductions to where they should be,” Mbadi insisted.
