Nairobi is poised to retain its position as the largest recipient of county revenue after a new allocation plan raised funding for all 47 devolved units, with counties set to share Sh428 billion in the 2026/27 financial year following a hard-fought agreement between the National Assembly and the Senate.
The proposed distribution is contained in the County Allocation of Revenue Bill, 2026, which is currently before Parliament for consideration. The Bill outlines how the Sh428 billion approved for county governments will be shared under the latest revenue-sharing formula.
Under the proposal, Nairobi County will receive Sh22.11 billion, up from Sh21.42 billion in the current financial year. The increase of about Sh697 million keeps the capital city well ahead of the rest of the counties in terms of equitable share allocations.
Nakuru is next with an allocation of Sh14.90 billion, compared to Sh14.46 billion currently, while Turkana's share rises from Sh13.89 billion to Sh14.27 billion.
Kakamega is set to receive Sh14.07 billion, an increase from Sh13.67 billion, while Kiambu's allocation rises from Sh13.07 billion to Sh13.51 billion. Kilifi will receive Sh13.18 billion, up from Sh12.81 billion.
Mandera's allocation has been proposed at Sh12.59 billion, up from Sh12.27 billion, while Bungoma's share rises from Sh11.84 billion to Sh12.21 billion. Kitui is set to receive Sh11.85 billion compared to Sh11.50 billion in the current financial year.
A number of counties will now receive allocations above the Sh10 billion mark. Meru's share grows to Sh10.90 billion from Sh10.55 billion, while Wajir moves from Sh10.51 billion to Sh10.85 billion. Machakos will receive Sh10.51 billion, up from Sh10.18 billion.
Kisii joins the list of counties receiving more than Sh10 billion after its allocation rises to Sh10.11 billion from Sh9.82 billion. Narok also crosses the threshold after its share increases from Sh9.77 billion to Sh10.07 billion.
Several other counties have also secured higher allocations under the proposed framework. Kisumu will receive Sh9.18 billion, compared to Sh8.90 billion this year, while Uasin Gishu's allocation increases to Sh9.26 billion from Sh8.98 billion.
Migori's share rises from Sh8.88 billion to Sh9.16 billion. Kwale is set to receive Sh9.33 billion, up from Sh9.08 billion, while Makueni's allocation climbs from Sh8.98 billion to Sh9.25 billion.
Homa Bay will receive Sh8.91 billion, up from Sh8.65 billion, while Garissa's share increases from Sh8.88 billion to Sh9.21 billion.
At the Coast, Mombasa's allocation rises to Sh8.66 billion from Sh8.38 billion, while Tana River is set to receive Sh7.45 billion, up from Sh7.22 billion.
Busia's allocation increases to Sh8.20 billion from Sh7.96 billion. Murang'a will receive Sh8.23 billion, compared to Sh7.97 billion, while Trans Nzoia's share rises from Sh7.99 billion to Sh8.24 billion. Siaya is set to receive Sh8.01 billion, up from Sh7.75 billion.
Despite the increases across all counties, Lamu remains the smallest beneficiary. Its allocation rises from Sh3.86 billion to Sh3.99 billion.
Other counties recording increases include Tharaka-Nithi, whose share grows from Sh5.06 billion to Sh5.22 billion, Elgeyo Marakwet, which moves from Sh5.52 billion to Sh5.69 billion, Isiolo, whose allocation rises from Sh5.63 billion to Sh5.82 billion, and Taita Taveta, which will receive Sh5.94 billion compared to Sh5.76 billion this year.
The Senate Finance and Budget Committee said the proposed allocations are anchored on the approved Fourth Basis for sharing revenue among counties.
The formula allocates 45 per cent based on population, 35 per cent as an equal share, 12 per cent based on poverty levels and eight per cent according to geographical size.
In its report, the committee said the model was designed to cushion counties from losing resources while ensuring areas disadvantaged by the formula receive additional support.
“The baseline allocation protects every county from losing resources, while the affirmative action allocation ensures counties that are disadvantaged by the formula receive additional support.”
According to the committee, the balance of the additional resources was distributed using the approved Fourth Basis formula.
The proposed allocations come after President William Ruto signed the amended Division of Revenue Bill into law last week following negotiations between the two Houses of Parliament.
The law determines how nationally collected revenue is divided between the national and county governments.
County governments eventually secured Sh428 billion after negotiations raised the allocation from the Sh420 billion proposed by the National Treasury and approved by the National Assembly.
The Senate had initially sought Sh454 billion for counties before settling on the agreed figure.
The approved allocation represents an increase of Sh13 billion from the Sh415 billion allocated to counties during the current financial year.
County governments are expected to use the additional resources to support services such as healthcare, agriculture, water provision, county road maintenance and early childhood education.
The proposal retains a baseline allocation of Sh387.43 billion derived from previous county allocations. Another Sh4.46 billion has been reserved for an affirmative action programme aimed at supporting counties considered disadvantaged under the revenue-sharing formula.
The counties earmarked for the additional support are Elgeyo Marakwet, Embu, Isiolo, Kirinyaga, Laikipia, Lamu, Nyamira, Nyandarua, Samburu, Taita Taveta, Tharaka-Nithi and Vihiga.
Each of the 12 counties will receive an additional Sh371.7 million through the programme.
A further Sh36.12 billion above the baseline allocation has been distributed using the Fourth Basis formula, resulting in larger increases for counties with bigger populations and higher development demands.
If Parliament approves the Bill and the President grants assent, county governments will begin implementing their 2026/27 budgets from July 1.
The higher allocations are expected to help counties meet growing expenditure demands, strengthen delivery of devolved services and finance development programmes as governors continue pushing for a larger share of national revenue in future budget cycles.