By Mumo Judah, June 22, 2026
Nairobi County is set to receive the largest share of devolved funds under the County Allocation of Revenue Bill, 2026, after lawmakers adopted a new revenue-sharing formula that heavily rewards population size and service demands.
Under the revised Fourth Basis formula, Nairobi will receive Sh22.11 billion in the 2026/27 financial year, cementing its position as the country’s biggest beneficiary and marking an increase of approximately Sh697 million from the previous allocation.
The new framework will see county governments collectively share Sh428 billion, with the formula seeking to balance population, poverty levels, land area and historical allocations while ensuring no county loses revenue.
Nakuru County emerged as the second-largest beneficiary with an allocation of Sh14.90 billion, followed closely by Turkana County at Sh14.30 billion and Kakamega County at Sh14.10 billion.
Kiambu County will receive Sh13.50 billion, while Kilifi and Mandera counties have each been allocated Sh13 billion.
Bungoma and Kitui counties are each set to receive Sh12 billion, with Meru County rounding off the top ten recipients with an allocation of Sh11 billion.
The new allocation model includes safeguards aimed at protecting counties from financial uncertainties. Clause Five of the mediated bill stipulates that any revenue shortfalls experienced by the national government will not affect county disbursements, meaning counties will continue receiving their full allocations even if national revenues fall below projections.
In addition, the formula retains a baseline allocation of Sh387.43 billion to ensure that no county receives less than what it has historically been allocated, a move intended to cushion counties that could have lost funds under the revised model.
The legislation also provides for an affirmative action fund worth Sh4.46 billion targeting economically disadvantaged regions.
Twelve counties, including Lamu, Isiolo, Samburu and Vihiga, will benefit from the fund, with each county receiving an additional Sh371.7 million aimed at accelerating development and addressing historical inequalities.
Supporters of the formula argue that it reflects changing demographic realities and increasing demand for services, particularly in highly populated counties, while maintaining equity through special allocations for marginalized regions.
The County Allocation of Revenue Bill, 2026, now paves the way for county governments to begin planning their budgets for the upcoming financial year, with leaders expressing optimism that timely disbursement of funds will enhance service delivery and support development projects across the country.
