Reform Failures Deny Nairobi Multi-Billion Boost

Nairobi County has missed out on Sh5.7 billion in World Bank funding after failing to meet key governance and financial management requirements under a performance-based support programme. The loss of the grant is a significant setback for Kenya’s capital, denying the county resources that would have helped finance critical development projects and improve service delivery to millions of residents.

The funding was part of the Kenya Urban Support Programme (KUSP II), a World Bank-backed initiative designed to strengthen urban governance while supporting counties in expanding infrastructure and public services. However, unlike previous allocations that were distributed automatically, the latest funding depended on counties meeting strict performance benchmarks. Nairobi was among the counties that failed to satisfy those conditions, leading to the withdrawal of the funds.

Despite being Kenya’s economic hub, Nairobi was unable to meet the required standards within the evaluation period. As a result, the county lost access to billions of shillings that could have been invested in roads, drainage systems, markets, public spaces, waste management and other essential urban infrastructure. Nairobi is grappling with growing pressure to improve services for its rapidly expanding population. Residents have repeatedly raised concerns over poor roads, blocked drainage systems, uncollected garbage, unreliable public facilities and frequent flooding in several estates whenever heavy rains occur. Many had hoped that additional development funding would help the county tackle some of these long standing challenges.

Performance-based grants are becoming increasingly common because development partners want to ensure taxpayers’ money is used responsibly. Instead of releasing funds without conditions, donors now require counties to prove they have proper financial controls, transparent procurement systems and the capacity to deliver projects efficiently. The loss of the Sh5.7 billion grant also raises fresh questions about governance at City Hall. Analysts argue that while Nairobi generates more revenue than most counties, strong revenue collection alone is not enough. Counties must also demonstrate prudent financial management, timely reporting and compliance with legal and administrative requirements if they hope to attract continued support from international development partners.

Nairobi serves as the country’s commercial centre, hosting thousands of businesses that depend on reliable infrastructure and efficient county services. Better roads, cleaner markets, improved drainage and modern public facilities not only improve the quality of life for residents but also reduce the cost of doing business and attract more investment.

Although the county has lost this round of funding, experts note that the setback should serve as a wake-up call rather than the end of the road. Strengthening financial oversight, improving accountability, speeding up reforms and ensuring projects are implemented as planned could help Nairobi qualify for future performance-based grants.

Meeting future targets will require stronger leadership, better coordination across departments and a renewed commitment to transparency in the management of public resources.

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