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Kenya, June 05, 2026 - A fresh battle over county funding has begun after the Senate proposed increasing the equitable share of revenue to county governments to KSh454.7 billion for the 2026/27 financial year, setting the stage for negotiations with the National Assembly and the National Treasury.
The proposal comes at a time when counties are facing growing pressure to deliver healthcare, agriculture, water, infrastructure and other devolved services amid rising costs and increasing demands from residents.
Senators argue that devolved units require additional resources to effectively discharge their constitutional mandates, particularly as inflation, population growth and expanding service delivery obligations continue to stretch county budgets.
The proposed allocation is significantly higher than the KSh420 billion equitable share approved in the recently adopted Budget Policy Statement (BPS) by the National Assembly.
If adopted, the Senate's proposal would represent one of the largest allocations to county governments since the introduction of devolution under the 2010 Constitution.
The talks are expected to inform deliberations on the Division of Revenue Bill, a key piece of legislation that determines how nationally collected revenue is shared between the national and county governments.
County leaders have consistently argued that while devolved governments are responsible for delivering critical frontline services, the resources allocated to them have not kept pace with growing expenditure needs.
Governors, through the Council of Governors, have repeatedly called for increased funding, citing rising wage bills, healthcare demands and the cost of maintaining development projects across the 47 counties.
The debate comes against a backdrop of mounting fiscal pressures facing the national government.
Kenya's public debt is approaching KSh13 trillion, while debt servicing continues to consume a substantial portion of government revenue. Treasury has therefore maintained that balancing county funding demands with national expenditure obligations remains a delicate exercise.
The Senate, however, argues that counties should not bear the burden of fiscal consolidation efforts, especially given their central role in delivering services that directly affect citizens.
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Several senators have pointed to persistent challenges in county healthcare systems, inadequate road networks, water shortages and underfunded agricultural programmes as evidence that counties require additional resources.
The push for a higher allocation also comes as the government continues implementing major reforms in the health sector under the Social Health Authority (SHA), with counties expected to play a critical role in the delivery of primary healthcare services.
The negotiations will test the longstanding tensions between the two levels of government over resource allocation, a debate that has characterized nearly every budget cycle since devolution was introduced.
Beyond the equitable share, counties are also expected to receive conditional grants and additional allocations from both the national government and development partners to support specific programmes.
The outcome of the negotiations will be closely watched by governors, county assemblies and residents, as it will determine the level of funding available for local development projects and essential public services during the 2026/27 financial year.
With Parliament already having approved the Budget Policy Statement and the Treasury preparing detailed budget estimates, the revenue-sharing talks are likely to become one of the most closely contested fiscal debates in the coming weeks.
For counties, the argument remains straightforward: devolved governments are closest to the people and therefore require a larger share of national resources to meet growing expectations for service delivery.
For Treasury, however, the challenge is balancing those demands against shrinking fiscal space and the country's increasing debt obligations.
The final allocation is expected to emerge after negotiations between the Senate, National Assembly and the National Treasury before the 2026/27 budget is formally adopted.