Kenya’s 47 counties will receive Sh502 billion in the 2026/27 financial year, Treasury Cabinet Secretary John Mbadi has announced in the national budget presented to Parliament on June 11, 2026.
Mbadi told lawmakers on Thursday that the allocation combines different funding streams meant to support devolved services across the country. He said Sh428 billion will go as equitable share to county governments, while Sh74 billion will come from traditional allocations, loans, and grants from development partners.
“Total allocation to county governments is projected at Sh502 billion, of which Sh428 billion is the equitable share and Sh74 billion is traditional allocation from the national government’s share of revenue, loans, and grants from development partners,” Mbadi said.
The Sh428 billion equitable share represents the main transfer to counties and marks an increase of Sh13 billion from the Sh415 billion approved in the 2025/2026 financial year. The rise continues a steady upward adjustment in county funding under the current budget cycle.
The allocation follows a long-running dispute between the National Assembly and the Senate over the Division of Revenue Bill, 2026, which delayed agreement on how national revenue would be shared. The matter was resolved after seven mediation sessions that produced a final compromise.
The deal also restored Clause 5 of the Bill, which protects county allocations in case national revenue falls short of projections. Under this arrangement, any deficit will be absorbed by the national government to prevent cuts to county budgets.
Co-chair of the mediation committee and chair of the National Assembly Budget and Appropriations Committee, Samuel Atandi, said the outcome reflected constitutional obligations. “We have settled on Kshs 428 billion. This is a constitutional imperative, and Kenyans are going to be happy,” said Atandi.
Senate Finance and Budget Committee chair Ali Roba said the talks were difficult but productive. “It has been a very difficult but cordial engagement to push the country forward,” said the Mandera Senator.
Lawmakers welcomed the agreement, saying it strengthens devolution and stabilises county finances. Narok Senator Ledama Olekina supported the deal and the reinstatement of Clause 5, while Migori Senator Eddy Oketch called for stronger accountability in county spending.
The agreement will now go to both Houses of Parliament for approval before implementation in the new financial year. Once approved, it will guide the distribution of funds across the 47 counties, which rely on the allocations to run health services, agriculture programmes, and local infrastructure projects.
Counties will also receive Sh10.25 billion under the Equalisation Fund to support areas that have historically lagged behind in development.
The mediated arrangement also provides legal protection for county funds under the Division of Revenue Act, 2026, ensuring counties are not affected by national revenue shortfalls during the financial year.
In the wider fiscal framework, Mbadi presented a total national budget of Sh4.84 trillion for the 2026/27 financial year. The settlement on county allocations came after prolonged negotiations between the Treasury and Parliament over competing fiscal pressures.
In the 2025/2026 financial year, counties received Sh415 billion, up from Sh387.4 billion in 2024/2025. Distribution continues to follow the Commission on Revenue Allocation formula, which considers population, land size, and poverty levels.
Under that formula, Nairobi received Sh21.1 billion, Nakuru Sh14.3 billion, Turkana Sh13.8 billion, Kakamega Sh13.6 billion, Kiambu Sh12.9 billion, and Kilifi Sh12.7 billion. At the lower end, Lamu received Sh3.4 billion, Tharaka Nithi Sh4.6 billion, Elgeyo Marakwet Sh5.0 billion, and Isiolo Sh5.1 billion.