County governments will receive Sh420 billion as the equitable share in the 2026/27 budget.
This is after the cabinet today endorsed a Sh4.7 trillion budget where the financial year projects total revenues of Sh3.53 trillion against total expenditure of Sh4.7 trillion.
The expenditure allocations comprise Sh3.46 trillion for recurrent spending, Sh749.5 billion for
development, Sh495.7 billion in transfers to county governments, and Sh2 billion for the Contingency Fund.
“Cabinet has also endorsed the financial year 2026/27 Budget, totaling Sh4.7 trillion. The Budget projects total revenues of Sh3.53 trillion against total expenditure of Sh4.7 trillion. Expenditure allocations comprise Sh3.46 trillion for recurrent spending, Sh749.5 billion for development, Sh495.7 billion in transfers to county governments, and Sh2 billion for the Contingency Fund. Under the Division of Revenue Bill, 2026, county governments will receive Sh420 billion as an equitable share, representing 21.9 per cent of the most recent audited revenue in line with constitutional requirements,” the dispatch from the cabinet chaired by President William Ruto in Nairobi stated in part.
The cabinet has also approved Sh15.2 billion for the Equalization Fund with a further Sh75.7 billion is proposed under the County Governments additional allocation Bill, 2026, bringing total county transfers to KSh495.7
billion.
The macroeconomic outlook remains positive, with GDP growth projected at 5 per cent in 2025 and 5.3 per cent in 2026, supported by favorable weather, improved agricultural productivity, climate smart investments, and continued implementation of the Bottom-Up Economic Transformation Agenda.
The 2026 Budget Policy Statement, themed “Accelerating Gains under the Bottom-Up Economic Transformation Agenda for Inclusive and Sustainable Growth”, marks a transition from fiscal stabilization to scaled-up investment to drive the next phase of economic growth.
According to the Kenya Kwanza government, the top priority investments for the next financial year will target education, health, energy, infrastructure, agriculture, social protection, and national security, alongside reforms
in public finance management, digitization, State-owned enterprises, and public-private partnerships.
The Budget Policy Statement, the fourth under the Kenya Kwanza Administration, will now be submitted
to Parliament to guide the Government’s fiscal strategy.
