President William Ruto has assented to the Division of Revenue Bill, 2026, formally setting the framework for how nationally raised revenue will be shared between the National Government and County Governments for the 2026/27 financial year.
Under the new allocation, county governments will receive a total of Ksh428 billion, marking an increase of Ksh13 billion compared to the Ksh415 billion allocated in the previous financial year. The adjustment represents a 15 percent rise and signals continued efforts to strengthen devolved governance structures across the country.
According to the government, the allocation meets and exceeds the constitutional minimum threshold of 15 percent, reaffirming its commitment to deepening devolution and improving service delivery at the county level. The increased funding is expected to enhance operations in key sectors such as healthcare, agriculture, infrastructure development and local service delivery.
The Bill also provides Ksh10.25 billion for the Equalisation Fund, reflecting a slight increase aimed at accelerating development in marginalised and underserved regions. The fund is designed to bridge development gaps and ensure equitable access to basic services across all parts of the country.
In his remarks, the President noted that the revenue-sharing framework has been carefully structured to balance competing national priorities while maintaining fiscal sustainability. He pointed to rising expenditure pressures within the national budget, including obligations under Consolidated Fund Services, as key considerations in shaping the final allocations.
The government maintains that the approach taken in the Bill supports inclusive economic growth while ensuring that counties receive sufficient resources to deliver on their constitutional mandates. It also underscores the administration’s broader agenda of strengthening devolution as a pillar of governance.
The assent comes at a time when county governments continue to push for increased funding to meet growing demands for public services. The additional allocation is expected to ease pressure on devolved units and support ongoing development programmes at the grassroots level.
With the new framework now in place, attention is expected to shift to how counties will utilize the funds to address service delivery challenges and development priorities. Stakeholders are also likely to monitor implementation closely to ensure accountability and efficient use of public resources.
As the 2026/27 financial year approaches, the Division of Revenue Bill sets the stage for continued cooperation between the two levels of government in advancing national development goals while reinforcing the principles of devolution enshrined in the Constitution.
