Counties are set to receive a Sh18.65 billion funding boost from donors in the current financial year, targeting urban development, water and sanitationand other devolution programmes.
The grants include Sh13 billion for the Kenya Devolution Support Programme, Sh4.6 billion for the Kenya Water, Sanitation and Hygiene Programme and Sh1 billion for the Kenya Informal Settlement Improvement Project.
These three additional funding streams for the financial year ending June 30, 2026, form part of the billions counties receive from development partners in conditional grants and loans. The funds are earmarked for financing health, agriculture, urban development, water and sanitation, social protection, climate change mitigation and capacity-building programmes.
“In the financial year 2025/26, county governments will be provided with three new additional funds totaling Sh18.65 billion,” said Commission on Revenue Allocation Chairperson Mary Chebukati.
The additional allocations are part of the Sh56.9 billion that Kenya’s 47 counties are set to receive from donors and development partners in the current financial year.
Meanwhile, counties engaged in mining activities will receive an additional Sh2.93 billion as mineral royalties in the form of unconditional grants. Additionally, ten county governments will collect Sh11.5 million this fiscal year from court fines and fees.
County governments have long relied on conditional grants from both the national government and development partners to plug budget deficits caused by weak own-source revenue (OSR) collection.
Since the advent of devolution, counties have received Sh203.5 billion in conditional grants from the national government, while loans and grants from development partners have totalled Sh324.7 billion, bringing the combined support to Sh528.2 billion—far exceeding the Sh469 billion counties raised locally between 2013/14 and 2024/25. This represents only 67.7percent of the target OSR over the period.
In the 2024/25 financial year, counties collected Sh67.3 billion in own-source revenue, including Sh42.7 billion in ordinary revenue, similar to the previous year.
‘The shortfall in revenue collection has been attributed to unrealistic targets set by county governments and reliance on manual revenue collection systems.
These gaps often lead to budget deficits, affecting the implementation of planned activities and the accumulation of pending bills.
As a result, counties continue to rely heavily on allocations from the national government. Since devolution began, counties have received Sh4.14 trillion in equitable share allocations.
“On average, equitable share allocations have constituted 80.6% of total county revenue between financial years 2013/14 and 2025/26,” Ms Chebukati said. In contrast, conditional grants from the national government, along with loans and grants from development partners, accounted for 3.8percent and 6.2percent respectively over the same period. The contribution of OSR to total county revenue averaged just 9.4percent.
