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• Only six counties met the legal threshold for development spending in 2024/25.
• Kwale emerged as the top performer with a perfect development expenditure score of 1.000.
• 27 counties fell into the 'D' category, indicating they allocated well below the required 30 per cent to development projects.
• Taita Taveta recorded the weakest performance after allocating just 7.82 per cent of its budget to development.

These counties exemplify prudent fiscal management, with a deliberate focus on long-term investments that enhance service delivery and spur economic growth.

A new report by the Parliamentary Budget Office has revealed that only six counties in Kenya met the legal threshold for development spending in the 2024/25 financial year. The report, known as the County Fiscal Performance Measurement Index (CFPMI), assesses how counties manage public finances using objective fiscal indicators. According to the CFPMI, Kwale emerged as the top performer with a perfect development expenditure score of 1.000, followed by Embu (0.916), Kericho (0.849), Mandera (0.815), Siaya (0.814) and Uasin Gishu (0.813). These counties distinguished themselves by consistently prioritising long-term investment in infrastructure and public services while maintaining prudent financial management.

The Public Finance Management Act requires county governments to allocate at least 30 per cent of their budgets to development expenditure, with the remainder going towards recurrent costs such as salaries and operations. The CFPMI measures counties against this statutory requirement, providing an objective assessment of their fiscal performance. The report's findings may indicate potential exposure for county governments in terms of non-compliance with the Public Finance Management Act, particularly those counties that failed to meet the development spending threshold.

The CFPMI has been hailed as a game-changer in evaluating county performance, providing an objective tool that removes politics from debates on fiscal responsibility. Senate Majority Leader Aaron Cheruiyot described the report as 'pure science', based on data from independent constitutional institutions. The report's findings have raised concerns over the low level of development spending across counties, undermining the spirit of devolution. Only a small proportion of county resources eventually goes into development projects, meaning less money for essential services such as roads, health facilities and water projects.

Lawyers and compliance officers should be aware that the report's findings may indicate potential exposure for county governments in terms of non-compliance with the Public Finance Management Act, particularly those counties that failed to meet the development spending threshold.

Source: Original reporting via Senate Parliamentary Budget Office