Nairobi City County has recommended the suspension of new staff recruitment, casual hiring and internships as part of measures to contain its wage bill and comply with statutory spending limits.
The directive is contained in the Medium-Term Expenditure Framework (MTEF) Budget Preparation Guidelines for the 2027/2028 to 2029/2030 planning period, issued on July 28, 2026, by County Executive Committee Member for Finance and Economic Planning Affairs Ibrahim Nyangoya Auma.
Under the guidelines, the creation and filling of new positions have been suspended, with an exception for replacing staff who leave through natural attrition, such as retirement.
According to the circular, such replacements must remain budget-neutral and receive prior approval from the County Treasury.
“In line with the fiscal responsibility principles in the Public Finance Management Act 2012, the total wage bill should not exceed 35% of total revenues.
To ensure the wage bill remains within the medium-term targets, all new Recruitment of employees to fill new positions is halted except for replacements due to natural attrition, which must be budget-neutral and approved by the county Treasury,” reads part of the circular.
The measures are based on the Public Finance Management Act, 2012, which sets fiscal responsibility requirements for county governments, including limits on expenditure.
Payroll Controls and Three-Year Staffing Plans
The County has also introduced tighter controls on its payroll and staffing plans as part of measures to contain personnel costs and strengthen financial management.
Under the new guidelines, all employee salaries and other personnel payments must be recorded and tracked through the Integrated Personnel Payroll Data system (IPPD) to prevent unbudgeted additions to the payroll.
Any changes to employee remuneration, benefits or allowances must be guided by advice from the Salaries and Remuneration Commission (SRC).
Personnel changes within county departments will also require clearance from the County Treasury after confirming that funds are available.
The county has also introduced mandatory three-year staffing projections as part of the Sector Budget Proposals for the 2027/2028 to 2029/2030 Medium Term Expenditure Framework period.
County departments will be required to submit a Summary of Human Resource Requirements showing their approved staff establishment, the number of employees in post as of June 30, 2025, and positions funded for the 2026/2027 financial year.
They will also have to identify and justify the positions they intend to fund in each of the three outer years of the MTEF period, covering 2027/2028, 2028/2029 and 2029/2030.
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Nairobi County Tightens Hiring Rules to Control Wage Bill
To control growth in the wage bill, Nairobi County’s 12 Sector Working Groups must obtain written clearance from the County Treasury before setting aside funds for new employees, interns or casual workers, or upgrading existing positions.
Any proposed changes to salaries, benefits and allowances must also be supported by advice from the Salaries and Remuneration Commission (SRC) and recorded in the Integrated Personnel Payroll Data system.
The hiring freeze comes as the county moves from incremental budgeting to Zero Based Budgeting, requiring departments to justify their programmes and spending based on their necessity, efficiency and expected impact.
Nairobi will also prioritize the completion of stalled and ongoing development projects rather than launching new ones, as it seeks to make better use of its limited resources.
County sector heads have until August 20, 2026, to submit their draft sector budget proposals to the County Treasury, ahead of public hearings scheduled for September.
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Zero Based Budgeting
Nairobi is shifting to Zero Based Budgeting (ZBB) for the 2027/2028 financial year and the wider medium term as it seeks to strengthen spending controls amid limited resources.
Under the new approach, the county will move away from incremental budgeting, where departments rely on previous budgets when planning for new spending.
Instead, each programme will have to be justified from scratch, with departments required to demonstrate its necessity, efficiency and expected impact before receiving funding.
The county’s Sector Working Groups will also review existing programmes and identify one off expenditures that can be removed from future budgets.
Departments will be required to reassess their programmes using approved costing methods, with greater emphasis on efficiency, effectiveness and value for money.
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