Counties will receive Sh428 billion in the financial year starting July 1 after members of the National Assembly serving in the Mediation Committee on the Division of Revenue Bill, 2026 capped the allocation at Sh428 billion following several consultations with the National Treasury.
This forced senators sitting on the committee to climb down from their demand of Sh440 billion as the equitable share of revenue for the 47 devolved governments.
Co-chairperson of the Mediation Committee and chairperson of the National Assembly’s Budget and Appropriations Committee (BAC), Samuel Atandi, announced that Sh428 billion would be the final amount.
"The Sh428 billion is the very best we can offer on the table. Even if we adjourned, nothing much would change after that break," Mr Atandi said.
"From my side of the National Assembly, we have no further additions to make other than the Sh428 billion. We have justified our numbers and we cannot increase fiscal space any further. I plead that you take the money, shake hands and sign off on the mediated version of the Division of Revenue Bill, 2026."
Counties were allocated Sh415 billion in the 2025/26 financial year, while the National Treasury had proposed Sh420 billion for the 2026/27 financial year.
The proposed Sh428 billion represents an increase of Sh13 billion from the current allocation to counties.
Deadlock over county allocation
The increase comes after the National Assembly and the Senate hit a deadlock on Monday that threatened to paralyse county operations if the Bill failed.
Members of the Senate and the National Assembly in the Mediation Committee differed on the amount of equitable share to be allocated to county governments.
The Senate wanted Sh440 billion allocated to counties as shareable revenue, while the National Assembly initially stuck to Sh425 billion.
On Tuesday, Mr Atandi proposed an increase of Sh1 billion to bring the allocation to Sh426 billion before increasing it further to Sh428 billion after a short consultation.
“After consultations, we have been able to create room for Sh2 billion, bringing the total shareable revenue to counties to Sh428 billion,” said Samburu West MP Naisula Lesuuda.
Mr Atandi said that during a short break to consult the Treasury and experts from the Parliamentary Budget Office, the BAC identified areas in the recurrent expenditure vote that could absorb cuts to secure the additional Sh2 billion for counties.
“We did not touch the development vote because there are very critical projects that are ongoing and must be funded,” Mr Atandi said.
Chairperson of the National Assembly's Budget and Appropriations Committee and Alego Usonga MP Samuel Atandi.
Photo credit: Dennis Onsongo| Nation Media Group
“This is our very best. If the Senate can’t take it, then I will be happy if this mediation process collapses. I am very happy for this process to stall. I plead with senators to take this offer as the final allocation to counties.”
Mr Atandi added that if salary cuts were the only way to meet the Senate's demand for additional county funding, he would support reducing senators' salaries.
Senators push for higher allocation
Samburu Senator Steve Lelegwe proposed that the Senate reduce its demand from Sh335 billion to Sh332 billion and asked the National Assembly to consider the proposal.
“Is there any chance that the National Assembly can come and meet us halfway?” asked Ali Roba, the co-chairperson of the Mediation Committee.
Senator Ali Roba.
Photo credit: File | Nation Media Group
"Political mediation is about getting the best possible outcome from the least favourable circumstances. Our colleagues have demonstrated that where we have reached is like milking a stone. We may not have achieved the ideal outcome, but we have made progress," Mr Roba said.
Narok Senator Ledama Ole Kina argued that the Sh4 billion gap between the Senate and National Assembly positions was relatively small and proposed a compromise of Sh430 billion.
“I am ready to take a pay cut if it will help secure the additional Sh4 billion for counties,” Mr Ole Kina said.
"It is true that mediation is about achieving a compromise. But I find it difficult to agree because our role is to protect the interests of counties."
The National Assembly and the Senate are undertaking mediation on the contentious Division of Revenue Bill, 2026, which determines how nationally raised revenue is shared between the national and county governments.
The disagreement arose after the National Assembly passed the Bill allocating Sh420 billion as the equitable share for counties in the financial year beginning July 1, 2026.
The Senate amended the Bill and increased the allocation to Sh454.7 billion, prompting the formation of the Mediation Committee to develop a compromise version of the legislation.
The Commission on Revenue Allocation (CRA) had proposed that counties receive Sh459 billion in the 2026/27 financial year.
The Constitution requires that county governments receive no less than 15 per cent of all nationally raised revenue, based on the most recent audited accounts approved by the National Assembly.
