Service delivery at risk as Treasury delays Sh34.6 billion July allocation to counties
This setback comes after the Treasury ended the previous fiscal year with no pending payments to counties, a sharp contrast to past years when arrears were common.
Counties started the 2025/26 financial year without receiving any funds from the Treasury, raising concerns about delays in service delivery and payments.
According to the latest Exchequer report, no equitable share was transferred to counties in July, the first month of the new fiscal year, even though Sh34.6 billion was expected.
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Under Article 202 of the Constitution, revenue collected nationally must be distributed fairly between national and county governments.
For the year ending June 2026, counties are scheduled to receive Sh415 billion in equitable share.
“The equitable share allocation to county governments is Sh415 billion as per the County Allocation of Revenue Bill, 2025,” the Treasury stated in its report on actual revenues and net exchequer issues as at July 31, 2025.
This setback comes after the Treasury ended the previous fiscal year with no pending payments to counties, a sharp contrast to past years when arrears were common.
In the 2023/24 financial year, Sh30 billion was still owed to counties by June 2024, pushing some budgets into the next year. By the end of June 2025, however, all county allocations had been fully settled.
In addition to the equitable share, counties expect Sh93.5 billion in grants this year.
“The County Governments Additional Allocations Bill, 2025 provides for extra allocations to county governments in the financial year 2025/2026 amounting to Sh93,533,610,590 to be disbursed through the respective Ministries, Departments and Agencies,” Treasury noted.
County administrations rely on these funds to pay salaries, implement development projects, and clear debts owed to contractors.
Delays have become frequent, often tied to revenue shortfalls and rising national debt repayments, especially to China.
Among the counties expecting the largest allocations this year are Nairobi (Sh21.4 billion), Nakuru (Sh14.4 billion), Turkana (Sh13.9 billion), Kakamega (Sh13.7 billion), Kiambu (Sh13 billion), Kilifi (Sh12.8 billion), and Mandera (Sh12.3 billion).
Twelve counties will each receive over Sh10 billion in equitable share, excluding grants and local revenues from fees and levies.
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