Counties to receive Sh495.7bn as Cabinet approves Sh4.7trn budget

 President William Ruto chairs a cabinet meeting at State House, Nairobi. [PCS]

Cabinet has endorsed the financial year 2026-27 budget totalling Sh4.7 trillion, allocating Sh495.7 billion in transfers to county governments as the national government projects total revenues of Sh3.53 trillion against total expenditure of KSh4.7 trillion.

Under the Division of Revenue Bill 2026, county governments will receive Sh420 billion  as an equitable share, representing 21.9 per cent of the most recent audited revenue in line with constitutional requirements, and Sh15.2 billion for the equalisation fund.

A further Sh75.7 billion is proposed under the County Governments Additional Allocation Bill 2026, bringing total county transfers to Sh495.7 billion.

Expenditure allocations comprise Sh3.46 trillion for recurrent spending, Sh749.5 billion for development and Sh2 billion for the contingency fund.

The macroeconomic outlook remains positive, with Gross Domestic Product (GDP) growth projected at 5 per cent in 2025 and 5.3 per cent in 2026, supported by favourable weather, improved agricultural productivity, climate-smart investments and continued implementation of the Bottom-Up Economic Transformation Agenda (BETA).

The 2026 Budget Policy Statement, themed "Accelerating Gains under the Bottom-Up Economic Transformation Agenda for Inclusive and Sustainable Growth", marks a transition from fiscal stabilisation to scaled-up investment to drive the next phase of economic growth.

Priority investments target education, health, energy, infrastructure, agriculture, social protection and national security, alongside reforms in public finance management, digitisation, state-owned enterprises and public-private partnerships (PPPs).

The Budget Policy Statement, the fourth under the Kenya Kwanza Administration, will now be submitted to Parliament to guide the government's fiscal strategy.