How Counties Will Share Ksh428 Billion Bonanza as Ruto Signs Key Revenue Bill

Kenya’s 47 county governments are set to receive an increased share of national revenue following President William Ruto’s assent to the Division of Revenue Bill, 2026.

The legislation, which sets the framework for how collected taxes are shared between the national and county governments for the 2026/27 financial year, raises county allocations to KSh428 billion, up from KSh415 billion in 2025/26 financial year.

“Assented to the Division of Revenue Bill, 2026, which provides for the sharing of nationally raised revenue between the National Government and County Governments for the 2026/27 Financial Year in accordance with the Constitution,” said Ruto.

The Division of Revenue Bill 2026 is grounded in Article 218 of the Kenyan Constitution and is operationalized through consultations between the National Treasury, the National Assembly, and revenue advisory bodies.

Stronger Push for Devolution Financing

Increase in county allocations signals a policy focus on devolution as a key driver of service delivery and local development.

Also Read: Ruto Defends Education Budget, Cites South Korea and Japan

Under the new framework, counties will receive larger fiscal space to fund health services, agriculture programmes, early childhood education, and infrastructure projects.

The allocation also exceeds the constitutional minimum requirement threshold that at least 15% of nationally raised revenue be shared with county governments.

The National Treasury had to balance competing demands, including rising debt servicing obligations under the Consolidated Fund Services.

In his statement, Ruto reaffirmed that the allocations have been carefully structured to enable fiscal sustainability while supporting national development priorities, amid rising expenditure pressure within the fiscal framework.

Equalization Fund and Regional Balance

In addition to the equitable share, the legislation allocates a total of KSh10.25 billion to the Equalization Fund, intended to reduce regional disparities by financing basic services in marginalized areas.

The fund targets investments in water supply, health facilities, roads, and electricity connectivity in historically underserved regions.

The slight increase in the fund’s allocation reflects ongoing efforts to address uneven development across the country, particularly in arid and semi-arid regions that have lagged in infrastructure and social services.

National Assembly Budget and Appropriations Committee Chairperson Samuel Atandi stated that the step is a milestone in the budget making process.

“We have settled on Sh428 billion. This is a constitutional imperative and Kenyans are going to be happy,” said Atandi

Also Read: Kenya’s 2026/27 Budget Endorsed by Economic Experts Despite Debt and Inflation Worries

How Counties Will Share the Funds

The assent to the Division of Revenue Bill provides counties with clarity ahead of the budgeting cycle for the 2026/27 financial year.

With the revenue-sharing formula now legally anchored, county governments are expected to finalize their annual budgets and align development priorities with available resources.

The committee also reinstated Clause 5 of the Bill to shield county allocations from reductions arising from national revenue shortfalls.

In the 2026/27 National budget, the government reaffirmed its commitment to supporting devolved governance by allocating KSh 502.0 billion to county governments for the 2026/27 financial year.

This comprises KSh 428.0 billion as equitable share, KSh 16.6 billion in conditional allocations from the national government, and KSh 57.4 billion from development partners.

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