Globally, principals of schools play a very important role in enhancing students’ academic achievement. However, in the process of doing this, studies have shown that, principals are faced with a number of challenges resulting in poor performance of students. For instance public secondary schools in Ndhiwa Sub County had not been performing well academically as shown by Kenya Certificate of Secondary Education examination results between the years 2013 and 2018, compared to the neighboring Sub Counties within Homa Bay County. Average Kenya Certificate of Secondary Education examination mean scores was 4.7 when compared to other Sub-counties, which were higher; Homa-Bay: 6.0; Suba: 5.0 Rachuonyo North: 5.1; Rachuonyo South: 5.2; Mbita: 5.3. Hitherto the government policy based challenges principals faced relating to their areas of operations were unknown in Ndhiwa Sub County. The objective of the study was therefore to establish government policy based challenges faced by principals in enhancing students’ academic achievement in public secondary schools in Ndhiwa Sub County. Grounded theory was used to guide the study. A conceptual framework based on concept that challenges faced by principals (Independent Variables), must be overcome in order to enhance student academic achievement (Dependent Variables) was used. The study established that Government policy posed a big challenge with an overall mean rating of 3.21. The study recommended that government policy based challenges should be dealt with effectively by the principals and other stakeholders mainly the government in order to enhance student’s academic achievement in schools.