By Benadeta Mwaura - Reporter
Kenya, June 15, 2026 - President William Ruto has assented to the Division of Revenue Bill, 2026, ending months of negotiations between the National Assembly and the Senate and paving the way for county governments to receive KSh428 billion in equitable share allocations for the 2026/27 financial year.
The Bill, signed at State House, Nairobi, establishes how nationally raised revenue will be shared between the national and county governments, providing a critical framework for budget implementation and service delivery across the country's 47 counties.
The signing follows a breakthrough agreement reached by a parliamentary mediation committee after weeks of deadlock over the amount to be allocated to devolved units.
Senators had pushed for counties to receive Sh454.7 billion, arguing that devolved governments required additional resources to meet growing demands for healthcare, agriculture, infrastructure and other essential services.
The National Assembly had initially proposed a lower allocation of KSh425 billion before lawmakers settled on the compromise figure of KSh428 billion.
Under the approved framework, the national government will retain approximately KSh2.46 trillion, while the Equalisation Fund will receive about Sh10.25 billion to support historically marginalised regions.
These allocations have been carefully structured to safeguard fiscal sustainability while supporting national development priorities in light of rising expenditure pressures within the fiscal framework, including increased obligations under Consolidated Fund Services,” said President Ruto.
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The Division of Revenue Act is a constitutional requirement under Article 218, which mandates Parliament to determine annually how revenue collected by the national government is shared between the two levels of government before the start of each financial year.
The subsequent County Allocation of Revenue Bill will determine the specific amount each county receives.
The agreement offers counties greater certainty as they finalise their budgets ahead of the new fiscal year beginning on July 1.
The allocation represents an increase from the KSh415 billion counties received in the current financial year, reflecting continued efforts to strengthen devolution despite mounting fiscal pressures and rising debt-servicing obligations facing the national government.
County governments have consistently argued that increasing devolved allocations is essential to improving service delivery, particularly in sectors such as health, early childhood education, local infrastructure and agricultural extension services.
The signing of the Bill now clears one of the final hurdles in implementing the national government's KSh4.29 trillion budget for the 2026/27 financial year, which Treasury Cabinet Secretary John Mbadi has said seeks to balance fiscal consolidation with development priorities.