County government will share out Ksh 420 billion in the coming financial year after the National Assembly approved the Division of Revenue Bill 2026.
The amount which had been proposed by Treasury is less than the Ksh 534.96 billion the Council of Governors had recommended for 2026/27 financial year.
However, the equitable share to the devolved units is 1.2pc higher than Ksh 415 billion allocated in the current financial year 2025/26.
The proposed allocation stems from an estimated shareable revenue of Ksh 2.901 trillion where the national government is expected to receive Ksh 2.472 trillion while Ksh 9.6 billion has been allocated to the Equalization Fund for marginalized areas.
According to a report by the Budgets and Appropriations Committee, the marginal increase on the proposed allocation to counties arises from the revenue shortfalls, increase debt service expenditure, fiscal consolidation commitment to reduce the fiscal deficit to 5.3pc and limited access to domestic and external borrowing.
“The underperformance in revenue collection has not only affected budget implementation the national government, but also the transfer of equitable share to county governments over the years. For instance, in the first half of FY 2025/26, the transfer of county equitable share was below target by Ksh 33.2 billion against an estimated transfer
of Ksh 205.4 billion” said the committee.
In the FY2026/27
CoG called for higher allocation to cover wages of transitioning Universal Health Coverage workers, pay outstanding remuneration and benefits and other transferred functions.
The Commission of Revenue Allocation (CRA) has proposed an equitable share to counties amounting to Ksh 458.9 billion for the FY2026/27.
Members of Parliament also approved an extra Ksh 5.6 billion as partial payment of outstanding allocations, bringing the total funding for the Equalisation Fund in the 2026/2027 financial year to KSh 15.2 billion.
According to National Treasury estimates, ordinary revenue is projected to grow by 5.7pc equivalent to Ksh 157.5 billion in the coming fiscal year to reach Ksh 2.901 trillion.
According to the approved Budget Policy Statement, total expenditure including net lending for FY2026/27 will amount to Ksh 4.737 trillion.
