The State Department for Devolution is one of the biggest beneficiaries of the 2025/2026 budget estimates, its allocation rising five times to Sh8 billion.
According to budget estimates approved by the Cabinet, the department’s allocation will soar by 435 percent to Sh8 billion in the 2025/26 fiscal year, a steep rise from the Sh1.5 billion allocated in the previous period.
The department is tasked with bridging operations between the national government and the country’s 47 county governments.
This significant financial injection signals a deliberate push to enhance the capacity of county governments and address longstanding challenges in the devolution process.
The unprecedented 435 percent budget raise for the State Department for Devolution is designed to tackle persistent gaps in county capacity.
The department serves as a critical link between the national and county governments, offering technical support, training, and coordination for shared functions, such as disaster management.
It also oversees flagship initiatives like the Kenya Devolution Support Program (KDSP), a World Bank-supported effort that has improved local governance and financial management in several counties by providing capacity-building resources and performance-based incentives.
With the additional Sh8 billion, the department plans to expand its efforts in multiple areas. One key focus will be enhancing counties’ ability to manage their finances effectively.
This includes training programs for county officials on budgeting, accounting, and procurement compliance to reduce instances of mismanagement and irregular spending. Another priority is improving project implementation, ensuring that counties can execute development initiatives efficiently and deliver measurable outcomes for their constituents.
The budget boost will also strengthen coordination mechanisms, particularly in disaster management—a shared responsibility between the two levels of government. Counties often bear the brunt of responding to floods, droughts, and other emergencies, yet many lack the resources and systems to act swiftly. The increased funding will support the development of better communication channels and response frameworks, enabling counties to address crises more effectively.
In tandem with this move, the equitable share of revenue allocated directly to Kenya’s counties will see a modest uptick.
For the 2025/26 fiscal year, counties are set to receive Sh405.1 billion, a 1.25 percent increase from the Sh400.1 billion disbursed in 2024/25. Nairobi, the bustling capital and most populous region, will receive the largest share at Sh21.12 billion, while Lamu County, one of the smallest by population, will be allocated Sh3.41 billion.
According to the Revenue Allocation Bill currently before the Senate, the proposed equitable revenue share allocation of Sh405.1 billion to county governments for the 2025/26 financial year is based on several important considerations.
The raise comes after the county functions were transferred from the National Government, a process significantly aided by the December gazetting of numerous roles.
President Ruto announced at the time that the necessary funds would accompany the functions in the next financial year beginning July following the unbundling of the functions from the National Government by the Inter-Governmental Relations Technical Committee (IGRTC).
“I now direct the committee to take the next step of systematically identifying and transferring the requisite budgetary and other resources tied to these functions in the next fiscal year,” the President said at the time.
President William Ruto.
Photo credit: PCS
The increase in county allocations reflects recent trends in national revenue performance, even as the government faces mounting debt servicing costs and a weakened shilling.
The Bill also considers the government’s commitment to fiscal consolidation, aiming to reduce the fiscal deficit to 4.3 percent of GDP and ensure long-term fiscal sustainability.
The allocation is also shaped by ongoing financing constraints, with limited access to both domestic and international financial markets, and by lower-than-expected revenue collections due to global economic shocks and rising US interest rates.
Notably, while the national government bears the brunt of any revenue shortfalls and budget cuts, the Bill ensures that county governments continue to receive their full allocations, safeguarding county services and development even in a challenging fiscal environment.
This equitable share, mandated by the 2010 Constitution, is distributed using a formula that accounts for factors like population, poverty levels, and geographic size, aiming to ensure fairness in resource distribution across Kenya’s diverse regions.
Devolution, enshrined in Kenya’s 2010 Constitution, sought to decentralise power and resources from the national government to county governments, with the overarching goals of bringing services closer to citizens, promoting equitable development, and addressing historical disparities between Kenya’s regions.
Over the past decade, devolution has yielded tangible successes: counties have constructed new health facilities, upgraded schools, and improved local infrastructure, enhancing access to essential services for millions of Kenyans.
While the spotlight shines on the devolution ministry’s budget surge, the modest 1.25 percent increase in the equitable share to Sh405.1 billion is equally significant. This allocation provides counties with the core funding needed to deliver services like healthcare, education, and road maintenance.
Historically, the equitable share has been a lifeline for county governments, but its impact has been tempered by delays in disbursement.
In the 2023/24 fiscal year, for example, many counties reported receiving funds late, disrupting their ability to plan and execute projects. The Council of Governors (CoG) has long criticized these delays, noting that they force counties into a cycle of rushed spending at year-end, often compromising quality and accountability.
Despite the optimism surrounding the budget boost, significant concerns persist about the counties’ ability to absorb and utilise the additional resources effectively. In the 2023/24 fiscal year, several counties failed to spend their full allocations, citing procurement bottlenecks and delayed disbursements.
These inefficiencies have raised doubts about whether the increased funding will yield the desired impact without systemic reforms.
Auditor General Nancy Gathungu’s reports have further underscored these challenges, documenting cases of mismanagement, irregular procurement, and unaccounted-for expenditures in multiple counties.
For instance, some counties have awarded contracts without competitive bidding, while others have failed to provide documentation for large sums of money. These findings have fueled calls from civil society groups for greater transparency and citizen oversight to ensure that the new funds lead to better services rather than lining the pockets of corrupt officials.
