The proportion of national revenue allocated to counties has been shrinking, raising concern over the sustainability of devolved government funding, even as the total amounts given to the 47 counties continue to rise.
A new report by the Parliamentary Budget Office highlights that while allocations have increased over the years, counties are receiving a smaller slice of the national revenue pie.
The PBO, which provides guidance to lawmakers on budget and economic matters, notes that since the 2013/14 fiscal period, county allocations have more than doubled.
Despite this growth, the report warns that the declining share of ordinary national revenue going to counties could affect their ability to deliver services and execute development projects efficiently.
Data in the report show that allocations to counties rose from Sh190 billion in 2013/14 to Sh415 billion in the 2025/26 fiscal year, representing a growth of about 118 per cent.
“Despite this increase, there is a decline in county equitable share as a percentage of ordinary revenue of the national government,” reads the report, which also cautions the National Treasury against delays in the release of funds.
For the 2025/26 period, the Sh415 billion set aside for counties accounts for 15.1 per cent of the projected Sh2.75 trillion in ordinary national revenue, down from 19.3 per cent in 2021/22. The allocation reflects an increase of Sh27.58 billion, around seven per cent more than the Sh387.43 billion distributed in 2024/25.
Historical trends show that in 2020/21, counties received Sh316.5 billion, equal to 19 per cent of the Sh1.663 trillion collected. In 2021/22, the allocation was Sh370 billion, making up 19.3 per cent of the Sh1.92 trillion in ordinary revenue.
This same figure was maintained in 2022/23, representing 18.1 per cent of the Sh2.04 trillion collected. In 2023/24, counties got Sh385.4 billion, or 16.8 per cent of the Sh2.29 trillion. The 2024/25 allocation of Sh387.4 billion amounted to 16 per cent of Sh2.42 trillion.
The 2025/26 allocations are based on the fourth revenue-sharing formula, which divides funds using three main components. One key part of the formula is the Affirmative Action Allocation of Sh4.46 billion, which is shared equally among 12 counties that have historically spent less on development projects.
The report serves as a reminder to the national government to stick to agreed-upon schedules for fund release, and it underscores the need for careful monitoring to ensure devolved units receive their fair share of resources.
