Governors during the Biennial Devolution Conference at Eldoret Sports Club in Uasin Gishu County on August 17, 2023.
The amount of money sent to counties as a share of ordinary revenue has decreased, despite the annual equitable share to the devolved units increasing over the years, according to an analysis by the Parliamentary Budget Office (PBO).
An analysis report tabled in Parliament by the PBO—which advises lawmakers on economic and budget affairs-- shows that since the financial year 2013/14, the annual allocation to counties has increased by approximately 118 per cent- from Sh190 billion allocated in the financial year 2013/14 to Sh415 billion allocated in the 2025/26 fiscal period.
“Despite this increase, there is a decline in county equitable share as a percentage of ordinary revenue of the national government,” states the PBO document, as it warned the National Treasury against non-adherence to the cash disbursement schedule for county governments.
For instance, in the fiscal period 2025/26, the allocation to the 47 devolved units is equivalent to 15.1 per cent of the projected Sh2.75 trillion in ordinary revenue by the national government as audited by Auditor-General and approved by the National Assembly.
This is down from the 19.3 per cent in the financial year 2021/22. This translates to an increase of Sh27.58 billion, about seven per cent rise, from Sh387.43 billion allocated to counties in the 2024/25 fiscal period.
The budget office shows that the Sh316.5 billion allocated to the counties in the 2020/21 period accounted for 19 per cent of the Sh1.663 trillion ordinary revenue for the year.
Revenue allocation to counties
In the 2021/22 period, the Sh370 billion allocated to the counties was 19.3 per cent of the Sh1.92 trillion revenue realised.
The Sh370 billion was maintained as an equitable share to the counties in the 2022/23 period, representing about 18.1 per cent of the Sh2.04 trillion revenue collected during the period.
In the 2023/24 financial year, Sh385.4 billion was allocated to the devolved units, which is 16.8 per cent as a share of Sh2.29 trillion in national revenue.
In the last financial year- 2024/25- the Sh387.4 billion allocated to the devolved units was 16 percent of the Sh2.42 trillion in the national government’s ordinary revenue for the period.
The equitable share allocation of the 2025/26 fiscal period is based on the fourth basis/formula of revenue sharing to the counties, which is divided into three main components that relate to revenue allocation to counties.
The second part of the formula sets aside an Affirmative Action Allocation (AAA) of Sh4.46 billion, shared equally among 12 identified counties based on historically low expenditure on development.
