Nairobi Governor Johnson Sakaja has defended his administration's decision to move all Level 4 and 5 county hospital bank accounts to Sidian Bank, a move that has drawn sharp criticism and raised questions about financial prudence and transparency. The directive, issued through a circular by County Secretary Godfrey Akumali on November 5, 2025, instructed all hospital heads to open new accounts with Sidian Bank, ceasing their long-standing relationship with the Co-operative Bank of Kenya.

Governor Cites Efficiency and Better Terms

Appearing before the Senate Committee on Devolution and Intergovernmental Relations on Monday, November 24, 2025, Governor Sakaja maintained that the decision was purely administrative and in the best interest of the county. He argued that the previous banker, Co-operative Bank, was responsible for delays in processing salaries for healthcare workers, particularly when national government reimbursements were late. "It was an administrative issue. The main challenge we had was management; there were cheque delays, and we struggled to pay workers," Sakaja told the committee.

The governor further stated that Sidian Bank offered more favorable financial terms, including lower interest rates and no processing fees, compared to the previous bank. "Sidian had a cheaper interest rate and gave us a better offer. It is a good deal. We invited many banks, and Sidian presented the best package," Sakaja asserted. He emphasized that the Public Finance Management (PFM) Act does not restrict county governments to specific banks and that the move was legally sound.

Criticism and Allegations of Irregularity

The move has been met with significant opposition, most notably from Nairobi Senator Edwin Sifuna, who termed the directive "suspicious and potentially corrupt." Sifuna questioned the logic of moving substantial public funds from a Tier-1 institution like Co-operative Bank to a smaller, Tier-3 bank. "How you wake up one day and direct all of them to move to a tier-three bank cannot be explained any other way than that corruption is at play," Sifuna stated on social media platform X. He, along with other critics like Makadara MP George Aladwa, has called for greater transparency and public consultation on such a significant financial decision.

Concerns have also been raised about the ownership of Sidian Bank and potential political influence in the decision. During the Senate hearing, Senator Richard Onyonka questioned whether the choice of Sidian Bank was influenced by its ownership, which allegedly includes individuals connected to the current national government. Governor Sakaja dismissed these concerns, stating, "Every bank has owners, but what matters is good service... I don't think any bank should be discriminated against."

The Broader Financial Context

The controversy unfolds against a backdrop of Nairobi County's challenging financial situation. The Sakaja administration is concurrently seeking approval from the County Assembly for an unspecified loan amount to settle salaries and related expenditures, a request that has caused uproar among Members of County Assembly (MCAs) due to a lack of specific details. The county is also grappling with significant pending bills, which stood at KSh 86 billion, down from KSh 118 billion when Sakaja took office. While the administration has reported its highest-ever own-source revenue collection of KSh 13.8 billion this financial year, financial management practices in Nairobi County have historically received unfavorable audit opinions from the Auditor-General.

The decision to change bankers was formalized at the 69th County Executive Committee meeting on October 28, 2025. The circular from the County Secretary directed hospital CEOs to submit completed account opening forms to the finance department by November 7, 2025. Sidian Bank, for its part, has been expanding its engagement with government entities, having also been appointed as a receiving agent for the Social Health Authority (SHA) and the housing levy. The bank's executives see the Nairobi County hospital business as a significant opportunity to boost its deposit base and transactional income. As this debate continues, the Office of the Controller of Budget, mandated to oversee the implementation of county budgets, will be a key institution to watch, though no specific report on this transfer has been issued to date. The implications for service delivery in Nairobi's public hospitals remain a central concern for residents and watchdog groups.