Kenya’s 47 county governments have been allocated Sh428 billion in the 2026/27 Financial Year by President William Ruto’s administration in what could demonstrate commitment to the success of devolved governance.
The allocation was read by the National Treasury Cabinet Secretary John Mbadi during his presentation of the National Budget on Thursday in Parliament.
Mbadi’s allocation of Sh428 billion to devolved units comes a day after Parliament approved recommendations of the Mediation Committee on the Division of Revenue Bill, 2026, ending negotiations between the National Assembly and the Senate.
The breakthrough was reached after seven mediation sessions aimed at resolving differences over the equitable share of national revenue to be allocated to counties.
The agreement also reinstates Clause 5 of the Bill, a provision designed to protect county allocations from reductions resulting from national revenue shortfalls.
Speaking after the deal was reached, co-chairperson of the mediation committee and Chairman of the National Assembly Budget and Appropriations Committee, Samuel Atandi, welcomed the compromise.
“We have settled on Kshs 428 billion. This is a constitutional imperative, and Kenyans are going to be happy,” said Atandi.
Senate Finance and Budget Committee Chairman Ali Roba described the talks as challenging but constructive.
“It has been a very difficult but cordial engagement to push the country forward,” said the Mandera Senator.
He added that the swift passage of the Division of Revenue Bill would enable Parliament to process the County Allocation of Revenue Bill and approve the disbursement schedule needed to release funds to counties.
Several lawmakers praised the settlement, describing it as a major win for devolution and fiscal stability.
Narok Senator Ledama Olekina welcomed both the allocation and the restoration of Clause 5, while Migori Senator Eddy Oketch emphasised the need for stronger accountability mechanisms in county governments.
The agreement will now be tabled before both Houses of Parliament for consideration and approval before implementation.
This mediated figure follows a deadlock between the National Assembly and the Senate, ultimately marking a Sh13 billion increase from the Sh415 billion allocated in 2025/2026.
The Sh428 billion is legally secured for the 47 county governments to manage devolved services like healthcare, agriculture, and local infrastructure.
For the counties that are set to receive the Equalisation Fund, there will be an additional allocation of Sh10.25 billion to correct historical marginalisation across counties.
In the mediated compromise (Clause 5 of the Division of Revenue Act 2026) that outlines the shortfall, the law dictates that if national revenue falls short of projections, the National Government will bear the deficit, protecting county allocations from arbitrary cuts.
In the broader fiscal context, Mbadi tabled an overall national spending plan of Sh4.84 trillion. The devolution funding agreement was reached after marathon mediation sessions by lawmakers to settle differences, with the Senate originally pushing for a higher figure while the National Treasury cited tight fiscal constraints and heavy debt burdens.
In the 2025/2026 financial year, Parliament approved a total of Sh415 billion as the equitable share for the 47 county governments. This was an increase from the previous allocation of Sh387.4 billion.
The funds were distributed to the 47 counties based on the Commission on Revenue Allocation formula, with top allocations reflecting population sizes, land area, and poverty indices; the highest allocated counties (Equitable Share Estimates) were Nairobi City: Sh21.1 billion, Nakuru: Sh14.3 billion, Turkana: Sh13.8 billion, Kakamega: Sh13.6 billion, Kiambu: Sh12.9 billion, and Kilifi: Sh12.7 billion.
Counties that received the lowest were Lamu: Sh3.4 billion, Tharaka Nithi: Sh4.6 billion, Elgeyo Marakwet: Sh5.0 billion and Isiolo: Sh5.1 billion.
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