By Fridah Mbuvi, June 29, 2026
President William Ruto has assented to the County Allocation of Revenue Bill, 2026, paving the way for the disbursement of Ksh 428 billion in equitable share funding to Kenya’s 47 county governments for the 2026/2027 Financial Year.
The Bill was signed into law on Monday at State House, Nairobi, marking a significant milestone in the implementation of devolution by finalizing the legal framework governing the distribution of nationally raised revenue to counties.
The allocation represents 20.9 per cent of the most recently audited national revenue, comfortably exceeding the constitutional minimum of 15 per cent stipulated under Article 203(2) of the Constitution. The increase reflects the government’s continued commitment to strengthening devolved governance and enhancing service delivery at the county level.
Compared to the previous financial year, counties will receive an additional Ksh 13 billion, representing a 3.1 per cent increase from the Ksh 415 billion allocated during the 2025/2026 financial year.
Under the new allocation framework, Ksh 387.43 billion will be distributed as baseline equitable share funding to support counties’ recurrent expenditures, including the delivery of healthcare services, agricultural programmes, county administration and other essential public services.
An additional Ksh 36.1 billion will be shared using the Commission on Revenue Allocation’s weighted formula, which considers factors such as county population, poverty levels, land area and economic disparities to ensure a more equitable distribution of resources across the country.
The Act also sets aside Ksh 4.46 billion under an affirmative action programme targeting 12 historically marginalized counties. The funds are intended to accelerate development projects and improve access to essential public services in areas that have lagged behind in socio-economic development.
The signing follows Parliament’s earlier approval of the mediated Division of Revenue Act, 2026, which resolved differences between the National Assembly and the Senate over the sharing of nationally collected revenue.
Under the Division of Revenue Act, the national government will receive Ksh 2.46 trillion while the Equalisation Fund has been allocated Ksh 10.25 billion to finance development projects in marginalized regions.
A key provision retained in the final legislative framework is Clause 5, which safeguards county allocations from reductions arising from any shortfalls in national revenue collection. The provision requires the national government to absorb any revenue deficits, ensuring that counties continue receiving their full equitable share without disruption during the financial year.
The safeguard is expected to provide counties with greater financial certainty and enable them to plan and implement development projects without the risk of mid-year budget cuts.
With the County Allocation of Revenue Act now in force, county governments can formally execute their approved budgets and begin implementing programmes across key sectors, including healthcare, agriculture, roads, water, education and other devolved functions.
The enactment completes one of the final legal steps required before the full implementation of county budgets for the 2026/2027 financial year, allowing devolved units to access funds needed to sustain service delivery and undertake new development projects aimed at improving the lives of residents across the country.
