Treasury gives State agencies until December 31 to report on disposing of idle assets

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The National Treasury has told ministries, State corporations and other public entities to identify and get rid of idle, obsolete and surplus assets, and to report on progress by December 31, 2026.

Treasury Cabinet Secretary John Mbadi issued the directive in a circular to accounting officers and heads of public entities, details of which were first reported on Monday by Capital FM. The circular has not yet been posted on the Treasury website.

Under the directive, entities must carry out the exercise in line with the Public Procurement and Asset Disposal Act, 2015, and send status reports to the Public Procurement Regulatory Authority (PPRA), with a copy to the Treasury, by the end of the year.

Why the Treasury wants assets cleared

Mr Mbadi argues that keeping assets that are no longer in use makes them deteriorate further and lose value, while adding storage and maintenance costs. Idle stock can also create congestion, security concerns and accountability risks.

He directed public bodies to finish their disposal plans within the financial year in which they are drawn up, instead of carrying them over. The Treasury and the PPRA, working with other oversight institutions, will monitor compliance.

Entities have also been asked to find out why assets become obsolete or surplus in the first place, to use digital platforms to track and report on assets, and to make sure the officers who manage and dispose of public property understand their legal duties and are held to account.

Builds on February’s assets circular

The new instruction follows Treasury Circular No. 3/2026, dated February 12, 2026, on the optimal use of government assets. In that circular, Mr Mbadi said assessments by the Treasury had found “idle and underutilized assets, duplication, weak maintenance practices, and inadequate asset planning across the public sector entities”, which he said led to avoidable fiscal pressures and higher recurrent spending.

The February circular went beyond disposal. It directed Principal Secretaries and accounting officers to:

• list idle or underused public land, have it valued by registered government valuers and consider leasing, public-private partnerships, joint ventures or licensing to earn income from it;
• stop renting private office space where suitable government-owned space is available, with any lease needing prior approval;
• set rent for government houses in line with market rates and review it at least once every five years;
• pool vehicles, cut the number of idle ones and give priority to garages run by national polytechnics and TVET institutions within 40 kilometres for repairs, unless a vehicle is under warranty.

It also said unserviceable vehicles could, where appropriate, be handed to TVET institutions as training aids under approved disposal procedures. Entities were given 90 days to report back on land, buildings and road corridors.

The search for income from public property is part of a wider push to fund projects without new borrowing. The Treasury has, for example, cleared the Kenya Ports Authority to tender port concessions under the PPP framework.

Disposal already counts in performance contracts

Asset disposal is already scored in the public sector’s annual performance contracts. The Treasury’s guidelines for the 2025/26 cycle give “idle assets disposed” a 40 per cent weight in the asset management indicator, with the rest split between keeping verified asset registers and holding ownership documents for land, buildings and vehicles.

The guidelines list sale, transfer to other public institutions, destruction and donation among the allowed disposal methods. They required entities to submit annual disposal plans by October 15, 2025, and quarterly progress reports by the 15th day of the month after each quarter, with no score for late submissions.

The directive comes as the government’s cash position stays tight. Debt payments took about KSh490bn in the first quarter of 2026/27, close to 78 per cent of tax collected, leaving little room for spending on assets that sit unused.