Nairobi City County has plunged into a fiscal crisis after failing to approve its 2026/27 budget by the statutory June 30 deadline, forcing City Hall to operate under emergency austerity limits.

Under the strict provisions of the Public Finance Management (PFM) Act, the county is now restricted to an interim vote-on-account framework.

This mechanism caps expenditure at exactly half of the previous financial year’s allocation, strictly ring-fencing funds for essential services and salaries while completely freezing any new development projects or discretionary spending until an Appropriation Act is legally authorized.

Genesis of the impasse is a widening conflict between Governor Johnson Sakaja’s administration and Members of the County Assembly (MCAs).

The legislators have accused the executive of attempting to bulldoze incomplete financial proposals through the house without providing necessary accountability details.

According to County Assembly Majority Leader Peter Imwatok, the executive failed to respond to multiple summons to explain the fiscal estimates before the house went on recess.

Imwatok further argued that MCAs were overwhelmed by a chaotic, simultaneous dump of highly sensitive financial instruments.

“We are asking questions that have not been answered,” Imwatok stated adding that, “We want details of this borrowing, why the supplementary budget is being introduced on the last day of the financial year, who prepared it, and whether the Assembly was involved. We cannot process more than three documents in one sitting.”

The budget delays were heavily exacerbated by sudden structural changes in the county’s finance docket following the exit of former Finance County Executive Committee Member (CECM) Charles Kerich.

Majority Whip Moses Ogeto pointed out that the critical delays were tied to a standstill in gazetting Ibrahim Nyangoya Auma as the substantive Finance executive.

Now that Auma has been gazetted, MCAs demand he appear before the house to formally defend the estimates.

The Assembly leadership further claimed that the executive unlawfully withheld statutory funds allocated for the running of the County Assembly itself.

Mr Ogeto warned that the continued stalemate will paralyze infrastructural transformation across Nairobi’s 85 wards, noting that the executive has kept the house completely in the dark regarding development expenditure frameworks.