Building permits top revenue earner for Nairobi
By Alvin Mwangi, December 20, 2024
Building permits have now overtaken parking fees as Nairobi county’s top source of income.
The latest report from the Controller of Budget (COB) reveals that in the three months ending September 2024, building permits generated a staggering Sh484 million, surpassing parking fees, which brought in Sh434 million.
It marks a change, as parking fees have historically been the largest contributor to Nairobi’s revenue.
The new figures indicate that building permits now account for 22 per cent of the county’s total revenue, amounting to Sh2.26 billion generated from its own sources in the first quarter of the Financial Year 2024-2025.
It represents a 31 per cent increase compared to the Sh1.72 billion collected during the same period last year.
The sharp rise in revenue from building permits, an 86 per cent increase from Sh260.5 million in the same period last year, has been driven largely by the national government’s push for affordable housing.
Broader expansion
As construction projects continue to grow across the city, the demand for building permits has surged, reflecting the broader expansion of Nairobi’s real estate sector.
“The highest revenue stream, Sh484.39 million, was from plans and inspections (building permits), which contributed 22 per cent of the total OSR receipts during the reporting period,” the COB’s report stated.
Nairobi City County has seen a notable boost in construction activity, especially in the context of the government’s affordable housing programme, which has spurred both private and public sector projects.
As a result, building permits have overtaken parking fees, which traditionally contributed the largest share to the county’s own-source revenue (OSR).
Other significant revenue streams for Nairobi during the first quarter included hospital fees, which brought in Sh382.5 million, and business permits, which generated Sh275.8 million.
These figures reflect the growing diversification of the county’s income sources.
In comparison to the previous year, parking fees have seen a slight decrease in their contribution to Nairobi’s revenue, dropping from 24 per cent (Sh413.5 million) in the first quarter of 2023-2024 to 19 per cent (Sh434 million) in the same period this year.