Ksh 74.5 Billion Flowed Through NLC: Ksh 8.5 Billion Remains Unpaid to Landowners

Key Data

The NLC received Ksh 74,475,923,174 from acquiring bodies during the 2019–2025 term (Table 3.26, p. 72). Ksh 65,975,239,390 was paid to Project-Affected Persons (PAPs) — 89% of receipts. The Commission handled 118 compulsory-acquisition projects with an estimated 49,506 hectares acquired (Table 3.9, p. 15). Transport and related infrastructure accounted for 83 of 118 projects; water, irrigation, and sanitation for 19 (Table 3.9, pp. 15-16).

What Is Happening

The report records Ksh 74.5 billion received and Ksh 66 billion paid — leaving approximately Ksh 8.5 billion in the gap between receipts and disbursements. The report notes this paid figure 'represents 89% of total disbursements to the PAPs' (p. 72). It does not specify the reasons for the gap, but the year-by-year breakdown in Table 3.26 shows significant fluctuation, with FY2024/25 recording Ksh 19.6 billion received but only Ksh 10 billion paid.

The NLC strengthened internal controls by separating 'the functions of Valuation and Finance/payments which aligned with auditor general's recommendations' (Commissioner Murimi's Reflections, p. xii). CounselConnect's reading: this separation improved transparency but may have slowed processing.

Why It Is Happening

Legal and regulatory: compulsory acquisition is governed by the Land Act 2012, Sections 107-133. The report identifies the failure to finalize the Land Value Index (LVI) under Section 107A as a named challenge: 'LVI are essential for valuation of freehold land and community land for purposes of compensation. The finalization and operationalization of the Land Value Index across most counties had not been achieved yet' (p. 75).

Institutional: the NLC separated valuation and finance directorates, with the 'former directorate hand[ling] policy matters from project inception to issuance of awards while the latter deals with compensation related matters which includes payments' (p. 17). The report also notes 'Delayed remittances of compensation funds were frustrating and negatively impacted the project affected persons' (p. xii).

Practice Impact and Revenue

The report records that the NLC 'successfully defended matters that reduced acquisition claim compensation and helped in protection of public land,' and that NLC jurisprudence now includes 'estoppel against claims for compensation that is higher than the one accepted upon the commissioner's offer and non-execution of garnishee proceedings against the commission when the money has not been deposited with the commission' (p. 55). CounselConnect's reading: advocates representing PAPs must now advise clients at the offer stage, before acceptance, because acceptance may create estoppel.

CounselConnect's reading of the revenue position: PAP representation for the unpaid balance and for new acquisition projects remains a growing practice area. The 118 projects in Annex 1 (pp. 84-96) span dozens of counties and include LAPSSET at 27,445 hectares and Project Oil Kenya at 11,185 hectares. Fee structures must comply with Section 46(c) of the Advocates Act, which prohibits contingency arrangements; use retainer-based or fixed-fee models.

Revenue Impact

CounselConnect's opinion on revenue structuring (not financial advice): the gap between Ksh 74.5 billion received and Ksh 66 billion paid represents potential work for advocates. PAP representation on fixed-fee or retainer terms — not contingency, which is prohibited under Section 46(c) of the Advocates Act — for challenging valuations, pursuing delayed payments, or negotiating resettlement terms is a viable practice line. Target counties with the largest acquisition projects listed in Annex 1.

Strategic Insight — What Most Advocates Will Miss

CounselConnect's reading: the NLC's separation of valuation and finance directorates (p. 17) means the Commission now has an internal check that did not exist under the first commission — Commissioner Murimi states it 'aligned with auditor general's recommendations' (p. xii). CounselConnect's opinion: advocates who previously relied on relationship-based valuation negotiation will find that approach less effective. The winning posture shifts to evidence-based valuation challenges grounded in comparable-sales data and independent expert reports. This is strategic analysis, not legal advice.