Counties to share Sh428 billion as Ruto signs county allocation of Revenue Bill 2026

County governments are set to receive a record Sh428 billion from the National Treasury.[File, Standard]

County governments are set to receive a record Sh428 billion from the National Treasury after President William Ruto assented to the County Allocation of Revenue Bill, 2026.

This will pave the way for enhanced funding under a new revenue-sharing formula aimed at strengthening devolution and improving service delivery.

The new law allocates the equitable share of nationally raised revenue to Kenya's 47 county governments, representing 20.9 per cent of the most recently audited national revenue for the 2022/23 financial year, well above the constitutional minimum of 15 per cent.

President Ruto said the increased allocation would empower counties to better fulfil their constitutional responsibilities.

"The Act allocates KSh428 billion as equitable share of nationally raised revenue to the 47 county governments. This represents 20.9 per cent of the most recently audited national revenue, exceeding the 15 per cent minimum required under the Constitution," the President said.

He added that the new formula provides a stable and equitable distribution of resources across the country.

"The Act distributes the equitable share among the 47 counties in accordance with the revenue-sharing formula approved under Article 217 of the Constitution. The formula provides a stable baseline allocation while ensuring a fair distribution based on equal share, population, poverty level and geographical size."

The legislation, sponsored by Senate Finance and Budget Committee Chairperson Ali Roba, completed its parliamentary process after being passed by the Senate on June 17 and approved by the National Assembly on June 25 before being forwarded to the President for assent.

The Act operationalises the horizontal sharing of revenue among counties as provided for under the Division of Revenue Act, 2026.

Under the fourth revenue-sharing formula approved by Parliament in June 2025, the first Sh387.425 billion will be distributed using a baseline allocation linked to what counties received during the 2024/25 financial year to cushion them against sudden budget reductions.

The remaining funds will be shared using a formula that allocates 35 per cent equally among all counties, 45 per cent based on population, 12 per cent according to poverty levels and eight per cent based on geographical size.

Besides increasing county allocations, the new law introduces stricter fiscal discipline measures aimed at improving accountability in the use of public resources. It places ceilings on recurrent expenditure for county executives and county assemblies to contain rising wage bills and ensure more funds are directed towards development projects.

The legislation also strengthens transparency by requiring the National Treasury to publish monthly reports on disbursements to counties, while county governments will be required to account for all transfers received in their quarterly and annual financial reports.

President Ruto said the enhanced allocation would further entrench devolution by equipping counties with adequate resources to implement their budgets and development priorities.

"The enhanced allocation will strengthen devolution by equipping county governments with the resources they need to fulfil their constitutional mandate and deliver quality services in line with their budgets and development priorities," he said.