Building and construction have emerged as pivotal contributors to Nairobi’s economy, overtaking traditional revenue sources like parking fees, according to the latest report by the Controller of Budget.
Key Findings from the Report
The report for the first quarter of the 2024/25 financial year highlights that building permits and inspections accounted for 22% of Nairobi County’s internally generated revenue.
- Revenue from Building Permits:
The county collected Sh484 million from building permits and inspections during the three months ending September 2024, making it the highest revenue source. - Parking Fees:
Parking fees, traditionally the leading revenue stream, came in second, generating Sh434 million, or 20% of total revenue. - Overall Revenue Performance:
Nairobi County generated Sh2.26 billion in total revenue for the first quarter, a 31% increase compared to Sh1.72 billion during the same period in 2023.
The surge in revenue from building permits, an 86% increase from Sh260.5 million in 2023, is attributed to the national government’s push for affordable housing and investments by Chinese developers in areas such as Kilimani and Hurlingham.
Other Revenue Streams
- Unified Business Permits: Sh275.81 million
- Hospital and Health Facility Fees: Sh382 million
The Sakaja administration has surpassed revenue collection targets, raising hopes of achieving the Sh20 billion annual revenue mark for 2024/25.
Challenges in Pending Bills
Despite the strong revenue performance, the county continues to grapple with significant pending bills:
- As of June 30, 2024, unpaid bills totaled Sh121.78 billion, comprising:
- Recurrent Expenditures: Sh115.95 billion
- Development Expenditures: Sh5.31 billion
- By September 30, 2024, the outstanding balance stood at Sh121.57 billion, despite partial settlements during the reporting period.
Concerns Over Building Permit Issuance
City residents, MCAs, and activists have raised concerns about the lack of transparency in building permit issuance and oversight of construction projects. These concerns stem from poorly planned skyscrapers and incidents of building collapses.
- Investigations and Allegations:
- The Urban Planning Technical Committee was accused of irregularities in granting approvals.
- The County Assembly Sub-Committee on Planning, chaired by nominated MCA Nasra Nanda, revealed that permits were issued without proper oversight.
- On March 8, 2024, 154 building plans were reviewed, with 131 approved during a meeting led by Governor Johnson Sakaja. The approvals were later deemed illegal as they bypassed the CEC responsible for urban planning.
Call for Reforms
MCAs and activists are demanding reforms in the construction permit process to ensure better oversight and prevent future irregularities. Improved urban planning and adherence to safety standards remain crucial for sustainable development in Nairobi.
