President William Ruto Monday assented to the County Allocation of Revenue Bill, 2026, paving the way for the distribution of Sh428 billion in equitable share revenue among Kenya’s 47 county governments for the 2026/2027 financial year.
The Bill, sponsored by Mandera senator Ali Roba, who is the Chairperson of the Senate Standing Committee on Finance and Budget, was published on March 30, 2026, and introduced in the Senate on May 14, 2026. It was passed by the Senate with amendments on June 17 before being approved by the National Assembly without further changes on June 25.
Following approval by both Houses in identical form, it was forwarded to Ruto for assent.
The legislation operationalizes the Division of Revenue Act, 2026, which allocated Sh428 billion to county governments.
The allocation represents 20.9 percent of the most recent audited nationally raised revenue for the 2022/2023 financial year, exceeding the constitutional minimum allocation of 15 percent under Article 203(2).
The Act provides for the horizontal sharing of revenue among the 47 counties using the Fourth Basis for Revenue Sharing Formula, which Parliament approved in June 2025 under Article 217 of the Constitution.
Under the formula, the first Sh387.425 billion will be distributed based on each county’s 2024/2025 baseline allocation, while the remaining balance will be shared using a formula comprising a 35 percent equal share, 12 percent poverty index, 8 percent geographical size (capped at 10 percent), and 45 percent population.
The law also sets recurrent expenditure ceilings for county executives and county assemblies to guide spending.
In addition, it introduces new accountability measures for functions transferred between county and national governments under Article 187 of the Constitution.
County governments transferring functions will be required to determine the cost of those functions in consultation with the national government, while county assemblies must continue appropriating funds for the transferred functions at no less than the previous financial year’s allocation.
National government entities assuming devolved functions will be required to submit quarterly reports to the Senate and the respective county assemblies detailing implementation progress.
To enhance transparency in the disbursement of funds, the Act requires the Cabinet Secretary responsible for the National Treasury to publish monthly reports on transfers made to counties.
County treasuries must also record all transfers received and include them in their quarterly and annual financial reports under the Public Finance Management Act.
The enhanced allocation is expected to strengthen devolved governance by providing county governments with the financial resources needed to deliver essential services and implement their approved development plans and budgets.
