Nakuru County's Sh2.66 billion debt burden has intensified scrutiny as August elections approach, with local lawmakers demanding transparency over financial practices. The debt, which has grown from Sh483 million in 2013 to Sh2.6 billion, includes Sh865 million in liabilities from defunct local authorities and Sh1.75 billion in pending bills from county departments.
A medium-term debt management strategy paper revealed the county owed Sh2.6 billion as of December 31, 2020, after settling Sh1.3 billion and leaving a remaining balance of Sh1.2 billion. The inherited debts originated from the Nakuru county council, Nakuru and Naivasha municipal councils, and Molo town council, stemming from unpaid suppliers, legal fees, and salary arrears.
Members of the Nakuru County Assembly (MCAs) criticized the financial management, urging the county government to adopt stricter debt controls. They mandated a forensic audit by the Kenya National Audit Office (KENAO) to verify the Sh2.66 billion debt, citing concerns over fictitious bills and unexplained payments. The assembly also demanded annual debt reports and an ad hoc committee to review pending liabilities.
Issues emerged from a 2018 KENAO audit, which found discrepancies in the Nakuru Water Sewerage Company's debt claims. The county also failed to account for Sh1.477 billion allocated for debt settlements between 2014/2015 and 2020/2021. Some ineligible payments and terminated contracts were improperly classified as pending bills, according to the Auditor-General's findings.
The 2021/2022 budget included Sh55 million to settle 2020/2021 KRA tax arrears, but unresolved questions about debt accuracy persist. MCAs emphasized that any debt payments must await audit clearance, stating, "Any allocation for settlement of debts and pending bills will be subject to the forensic audit."