Kisumu County has reduced its local revenue target by more than Sh 1 billion as part of efforts to tackle a growing backlog of unpaid bills.
The move came as the County Assembly approved a Ksh 14.46 billion budget for the 2026/27 financial year.
The chairman of the Assembly’s Budget and Appropriations Committee, Joachim Oketch, said audited pending bills currently stand at Sh 1.5 billion and could rise to nearly Sh 2 billion by the end of the current financial year if no action is taken.
“We are dealing with a two-fold challenge: clearing historical debts while ensuring we do not create new ones,” he said.
Mr Oketch said unrealistic revenue projections had contributed to the accumulation of pending bills over the years.
To address the problem, the county has reduced its Own Source Revenue target from Sh 3.7 billion to Sh 2.3 billion, saying future spending will be based on more realistic revenue expectations.
According to Mr Oketch, the revised projections are intended to align expenditure with actual cash flow and reduce delays in paying contractors and suppliers.
The county has also introduced a rollover mechanism allowing contractors more time to complete projects while funding is being mobilised.
The officials say the arrangement will prevent ongoing projects from automatically being classified as pending bills.
In addition, the County Assembly has formed an ad hoc committee to investigate revenue leakages and recommend ways of improving local revenue collection.
Under the approved budget, Sh 8.54 billion has been allocated to recurrent expenditure, Sh 5.92 billion to development projects and Sh 587.36 million towards settling pending bills.
Mr Oketch said the measures were aimed at strengthening fiscal discipline and preventing the county from accumulating new debts while gradually clearing existing obligations.
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