Parliament approves Sh428 billion county allocation in 2026/27 revenue-sharing deal
Parliament has cleared a Sh2.901 trillion revenue-sharing framework, securing Sh428 billion for county governments and ending uncertainty over the 2026/27.
Parliament has approved a mediated revenue-sharing deal allocating Sh428 billion to counties in the 2026/27 financial year, clearing the way for the distribution of Sh2.901 trillion in national revenue. (Photo: Parliament of Kenya)
County governments are set to receive Sh428 billion in the 2026/27 financial year after the National Assembly approved the mediated Division of Revenue Bill, 2026, ending months of uncertainty over the annual revenue-sharing framework between the national and devolved governments.
The approval clears the way for the distribution of Sh2.901 trillion in nationally raised revenue between the national government and counties, providing certainty ahead of the new financial year budgeting cycle.
Under the approved framework, the national government will receive Sh2.464 trillion, while Sh10.25 billion has been allocated to the Equalisation Fund. The counties’ equitable share of Sh428 billion will finance key devolved functions, including healthcare, early childhood education, agricultural extension services, county roads, and water provision.
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A key provision retained in the mediated Bill is Clause 5, which stipulates that any shortfall in actual revenue collection will be borne by the national government, shielding county allocations from reductions during the financial year. Any revenue surplus will remain at the national level and may be used to reduce borrowing or manage public debt.
The approval follows a mediation process between MPs and senators after disagreements over the equitable share for counties. The final figure reflects a compromise reached after consultations involving both Houses of Parliament, the National Treasury, and the Parliamentary Budget Office.
Members of Parliament said the framework is designed to improve predictability in fiscal transfers and strengthen planning at the county level, enabling devolved units to better align budgets with development priorities and service delivery needs.
The Division of Revenue Bill is a central component of the annual budget process, determining how nationally raised revenue is shared between the two levels of government.
Its passage marks a key step in the budget cycle, paving the way for counties to receive their equitable share of revenue and sustain delivery of frontline public services across the country.