A long-running dispute over how national revenue should be shared between the two levels of government has been resolved after President William Ruto signed the Division of Revenue Bill, 2026, setting county allocations at Sh428 billion.
The signing followed approval by the National Assembly of a mediated version of the Bill, bringing to an end months of disagreement between the National Assembly and the Senate over the annual revenue-sharing formula.
The ceremony was attended by Deputy President Kithure Kindiki, National Assembly Speaker Moses Wetang’ula, Senate Speaker Amerson Kingi, Attorney General Dorcas Oduor, senior parliamentary leaders, and several Cabinet Secretaries.
The law settles a prolonged dispute over how national revenue should be divided between the national government and county governments, a process that had delayed budget certainty for devolved units.
Under the agreed framework, counties will receive Sh428 billion as their equitable share.
The National Assembly had initially pushed for a lower ceiling of Sh420 billion, while the Senate had advocated for an allocation above Sh450 billion, arguing that counties needed more funds to strengthen service delivery at the devolved level.
A mediation committee later brokered a compromise that both Houses accepted, balancing national fiscal concerns with the funding needs of county governments.
The Division of Revenue framework is based on a total shareable revenue of Sh2.901 trillion. Of this, the National Government receives Sh2.464 trillion, while counties receive Sh428 billion as an equitable share. An additional Sh10.25 billion is allocated to the Equalisation Fund, which supports marginalised and underserved areas.
The Equalisation Fund is intended to improve access to basic services and infrastructure in regions that have historically lagged behind.
The agreement is expected to restore stability in intergovernmental fiscal relations ahead of the 2026/27 budget implementation period.
County governments have in recent months raised concerns that delays in approving revenue-sharing frameworks could disrupt planning and slow down service delivery in key sectors such as health, agriculture, roads, and early childhood development.
Treasury Cabinet Secretary John Mbadi also announced that counties will receive a total of Sh502 billion in the upcoming financial year.
While presenting the budget in Parliament on June 11, 2026, Mbadi explained the breakdown of the allocation, stating that, “Total allocation to county governments is projected at Sh502 billion, of which Sh428 billion is the equitable share and Sh74 billion is traditional allocation from the national government’s share of revenue, loans, and grants from development partners.”
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