Kenya’s 47 county governments are set to receive a combined Sh428 billion in the 2026/27 financial year following the resolution of a prolonged revenue-sharing dispute between the National Assembly and the Senate.
National Treasury Cabinet Secretary John Mbadi announced the allocation while presenting the national budget in Parliament on Thursday, marking a Sh13 billion increase from the Sh415 billion allocated to counties in the current financial year.
The allocation follows Parliament’s approval of recommendations by the mediation committee on the Division of Revenue Bill, 2026, bringing to an end weeks of negotiations over the equitable share of revenue to be transferred to devolved units.
Lawmakers reached the agreement after seven mediation sessions aimed at reconciling differences between the two Houses on county funding. The deal also reinstated Clause 5 of the Bill, a provision that shields county allocations from cuts should national revenue collections fall below projections.
Speaking after the agreement, National Assembly Budget and Appropriations Committee Chairman and mediation committee co-chairperson Samuel Atandi described the settlement as a win for counties.
“We have settled on Sh428 billion. This is a constitutional imperative, and Kenyans are going to be happy,” he said.
Senate Finance and Budget Committee Chairman Ali Roba said the negotiations had been difficult but necessary to secure funding for devolved governments.
“It has been a very difficult but cordial engagement to push the country forward,” Roba noted.
The agreement paves the way for Parliament to process the County Allocation of Revenue Bill and approve the disbursement schedule required for the release of funds to counties.
Several legislators welcomed the settlement, terming it a boost for devolution and fiscal stability. Ledama Olekina praised the increased allocation and the restoration of Clause 5, while Eddy Oketch called for stronger accountability measures in county spending.
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Under the agreement, counties are guaranteed their full equitable share even if national revenue underperforms, with the national government required to absorb any resulting shortfall. The provision is intended to protect devolved services from funding disruptions.
The allocation will support key county functions, including healthcare, agriculture, early childhood education, water services, and local infrastructure development.
In addition to the equitable share, marginalised counties benefiting from the Equalisation Fund will receive a further Sh10.25 billion aimed at addressing historical development disparities.
The county allocation forms part of the broader Sh4.84 trillion national budget tabled by Mbadi. The final figure represents a compromise between the Senate, which had pushed for a higher allocation, and the National Treasury, which argued that fiscal constraints and debt obligations limited the government’s spending flexibility.
The agreement now awaits formal approval by both Houses before implementation, securing the largest equitable share allocation to county governments since the advent of devolution.
