Senators reject Treasury’s Sh405 billion allocation for counties, demand Sh465 billion

A fresh battle is looming in the Senate over the equitable share of revenue as senators side with governors in rejecting the National Treasury’s proposal of Sh405.1 billion allocation to counties.

The legislators have demanded an increased equitable share of Sh465 billion, arguing that the current proposal is inadequate to support devolved functions and new financial obligations.

The National Treasury, in the 2025 Budget Policy Statement, had proposed an allocation of Sh405.1 billion, a figure senators have rejected, terming it inadequate.

The Senate’s Finance and Budget Committee, chaired by Mandera Senator Ali Roba, argues that counties require more funding to cater to new financial obligations and devolved functions.

Roba explained that the additional Sh34.9 billion factored in the budget accounts for several crucial expenditures.

“Counties are expected to spend Sh4.1 billion on the housing levy, Sh6 billion on enhanced contributions to the National Social Security Fund, Sh11.8 billion on aggregation industrial parks, and Sh3.23 billion on community health promoters,” he said.

The senator also noted that Sh6.3 billion is needed for annual wage increments in the Integrated Personnel and Payroll Database (IPPD) system, while Sh3.5 billion is allocated to cover the doctors’ collective bargaining agreement.

To cushion counties from transitional effects due to the revenue-sharing formula, the committee has proposed an additional Sh14 billion.

“All these add up to Sh465 billion, and hence the committee recommends the House adopts this county equitable share for the Financial Year 2025/2026,” reads the report.

Roba further questioned the Treasury’s rationale for allocating Sh405.1 billion, arguing that ordinary revenue is projected to grow by Sh259 billion, yet counties are only set to receive a marginal increase of Sh17.7 billion.

“This will only serve to limit the ability of counties to adequately finance devolved functions,” he said.

Stagnated revenue

The senator also pointed out that shareable revenue stagnated for two financial years during the Covid-19 period, remaining at Sh370 billion before increasing slightly to Sh385 billion and the current Sh387.7 billion.

He argued that, unlike the national government, which has consistently seen revenue growth, county governments have not experienced substantial increments in funding over the past five years.

Kakamega Senator Boni Khalwale accused the national government of withholding at least Sh29.7 billion that should be allocated to counties.

Other Topics To Read

• Headlines
• National
• Senate
• county revenue
• Budget Policy Statement
• Senate Finance and Budget Committee
• revenue allocation
• Senators reject Treasury’s Sh405 billion allocation for counties
• demand Sh465 billion

“If that money had been allowed to go to county governments, the shareable revenue would have risen from Sh387 billion to Sh419 billion. This is a crime scene,” he said.

Equitable share

Nominated Senator Mariam Omar also weighed in on the matter, noting that the Sh29 billion budgeted under the Ministry of Health is for functions that constitutionally fall under county governments.

Governors have been pushing for at least Sh547 billion as their equitable share, arguing that anything less would hinder service delivery. The unfolding impasse mirrors a similar dispute last year, which resulted in a prolonged standoff before counties settled for Sh387.4 billion after intense negotiations.

With both the Senate and governors standing their ground on the Sh465 billion demand, the battle over revenue allocation is expected to intensify in the coming weeks as negotiations continue.