Governors have called for the inclusion of Universal Health Coverage (UHC) funds as part of the equitable share for the 2026/2027 financial year, rejecting proposals to allocate the money as conditional grants.
The move aims to safeguard the funds, ensure timely disbursement, and prevent potential industrial actions arising from delayed transfers.
Speaking before the Senate Finance Committee, chaired by Mandera Senator Captain Ali Roba on Tuesday, the governors, led by Council of Governors (CoG) Chair and Wajir Governor Ahmed Abdulahi, stressed the need for the funds to be guaranteed through the Division of Revenue Bill.
“We are seeking certainty for these funds. Conditional grants have historically experienced delays, which disrupt county operations and trigger strikes. By including the UHC monies in the equitable share, we can plan and implement health initiatives without delays,” Governor Abdulahi said.
The position was supported by the Commission for Revenue Allocation (CRA), which also appeared before the committee to provide guidance on the Division of Revenue Bill for 2026.
According to the CRA, counties are set to receive Sh458.9 billion in the 2026/2027 financial year, with Sh8.9 billion earmarked for absorbing UHC staff permanently.
The CRA recommended a shift away from conditional grants, proposing instead an increase in the equitable share to enable counties to better plan their budgets.
The commission also criticized the National Treasury’s proposed Sh420 billion, an increase of just Sh5 billion from the 2025/2026 financial year, noting it is insufficient to meet incremental salary costs estimated at Sh5.9 billion.
“No county should receive less than what it got last year,” emphasised CRA Chairperson CPA Mary Chebukati.
She stressed the need to factor in ongoing salaries, UHC staffing, and other agreed functions to ensure financial stability at the county level.
Governors have maintained their push for Sh534.97 billion for the next financial cycle, highlighting that the proposed Sh458.9 billion does not account for a circular from the Salaries and Remuneration Commission recommending salary increases across all civil servants, which would require an additional Sh10 billion for counties.
“There is a real danger of industrial action if counties are not adequately funded. The government must account for unbundled functions already published in the Kenya Gazette on 16th August 2025, which cost Sh65 billion and are yet to be reflected in the vertical shareable revenue,” Governor Abdulahi added.
Senators, however, argued that UHC funds should remain conditional grants to ensure they are used solely for health coverage, expressing concern that including them in the equitable share could lead to misallocation.
On pending bills, governors urged timely release of funds to prevent budgetary gaps and requested to be part of discussions when the Cabinet Secretary for Treasury, John Mbadi, meets the Senate later this week.
The debate follows President William Ruto’s promise last week during a joint parliamentary group meeting between UDA and ODM parties to increase county allocations by Sh35 billion in the 2026/2027 financial year, up from a baseline of Sh415 billion.
Governors also called for a review of the equalization policy, noting that certain regions remain marginalized, and urged policymakers to ensure equitable distribution of resources to strengthen county health systems and service delivery.
