Nairobi targets Sh15bn in land rates as City Hall hires debt collectors

The Nairobi City County Government has intensified its revenue collection strategies by contracting professional debt collectors to recover billions of shillings in outstanding land rates. This move signals a shift in enforcement as the administration seeks to bridge a significant budget deficit caused by non-compliance among property owners.

According to City Hall, the move focuses on a debt portfolio exceeding Sh15 billion. These arrears have accumulated over several years, despite numerous waiver programs and incentive schemes offered by the county. The new enforcement measures come into effect just days before the March 31 deadline for the current financial year's rate payments.

The decision to outsource debt recovery follows a period of sluggish revenue growth. County officials noted that while some property owners have been consistent, a large section of the real estate sector has ignored previous notices. The professional firms will now identify, track, and demand payments from chronic defaulters who have previously evaded internal county systems.

The Nairobi City County Executive Committee Member for Finance and Economic Planning emphasized that the county can no longer rely on voluntary compliance alone. The revenue is critical for funding essential infrastructure projects, including road maintenance, waste management, and the upgrading of health facilities within the city.

The locals have often complained about the quality of services, but the county maintains that service delivery is directly linked to the availability of funds. By engaging debt collectors, the government aims to ensure that every property owner contributes their fair share to the city's development kitty.

In the past, the county has used the Kenya Revenue Authority (KRA) to manage its revenue streams. However, the introduction of private firms specifically for debt recovery suggests a more aggressive approach to tackling the specific issue of land rate defaults. These firms are expected to use legal frameworks to ensure the money is paid.

Property owners who fail to settle their dues by the end of the month risk more than just late payment penalties. The county has warned that it may place caveats on properties with high arrears, preventing any transactions such as sales or transfers until the debt is cleared. In extreme cases, the government has the legal backing to seize and auction properties to recover the money.

The crackdown is expected to affect various sectors, including residential estates, commercial high-rises, and industrial zones. Many of these properties have benefited from improved infrastructure, yet the owners have not kept up with their statutory obligations to the city.

For many years, Nairobi has struggled with an outdated valuation roll, which made it difficult to bill properties accurately. However, with a new roll in place and the involvement of professional recovery agents, City Hall is confident that it will meet its internal revenue targets for the current period.

The county has urged all land owners to visit the Nairobi Pay portal or the offices at City Hall to verify their status. Those who are unsure of their balances are encouraged to settle them immediately to avoid the additional costs associated with debt recovery services and legal fees.

This enforcement drive comes at a time when President Ruto has called on county governments to improve their internal revenue generation to reduce over-reliance on the national exchequer. Nairobi, being the largest contributor to the country's GDP, is under pressure to lead by example in fiscal discipline.