Nairobi Governor Johnson Sakaja has defended the decision to move all county hospital accounts to Sidian Bank, saying the switch will end persistent delays in paying health workers and deliver better interest rates.
The governor told the Senate Committee on Devolution and Intergovernmental Relations on Tuesday that the previous banker, Co-operative Bank, often held up salary processing whenever the national government delayed releasing funds owed to the county.
“The main challenge we had was management; there were cheque delays, and we struggled to pay workers on time,” Sakaja said. “When national government delays releasing money, the previous bank would sit on our funds for days. Health workers were suffering.”
He explained that Nairobi invited several banks to present proposals for handling health-facility accounts. Sidian Bank emerged with the most attractive offer.
“Sidian had a cheaper interest rate and gave us a better offer. It is a good deal,” the governor said. “We invited many banks, and Sidian presented the best package. As for ownership, every bank has owners, but what matters is good service.”
Decision made in October
The shift was approved on 28 October 2025 during the 69th meeting of the Nairobi City County Executive Committee, which named Sidian Bank as principal banker for all public health facilities in the capital.
A letter sent to medical superintendents and officers in charge of Level 4 and Level 5 hospitals directed them to open new accounts and transfer existing balances.
“In its 69th Meeting held on 28 October 2025, the Nairobi City County Executive Committee resolved to designate Sidian Bank as its Principal Banker,” the letter stated.
Opposition raises transparency concerns
Some opposition politicians have criticised the move, questioning the transparency of the selection process and suggesting possible political links to the mid-tier lender.
Sakaja dismissed the allegations, insisting that the Public Finance Management Act does not restrict counties to particular banks.
“No law was broken,” he told the committee. “Counties are free to bank wherever they get the best service and the best rates. This was an administrative decision taken in the best interest of Nairobi residents and our health workers.”
He stressed that prompt salary payments are essential to maintaining morale among doctors, nurses and other clinical staff, especially after years of labour unrest in the sector.
Broader devolution tensions
Analysts say the controversy highlights ongoing friction between Kenya’s 47 counties and the national government over revenue and spending control.
In Nairobi, the country’s most populous county, even brief payroll delays affecting thousands of health workers can lead to go-slows or strikes that disrupt services at major facilities such as Mbagathi and Mama Lucy Kibaki hospitals.
Sidian expands public-sector reach
Sidian Bank, formerly known as K-Rep and rebranded after its acquisition by Centum Investment Company, has steadily grown its public-sector business in recent years. The bank and Centum have declined to comment on the Nairobi contract.
County officials say the transfer of accounts is progressing smoothly, with the first salaries through Sidian expected before the end of November.
Whether the change will finally resolve long-standing payroll problems or merely open a new chapter of banking disputes remains to be seen.
