President William Ruto has assented to the County Allocation of Revenue Bill, 2026, paving the way for the equitable distribution of Sh428 billion among Kenya’s 47 county governments for the 2026/2027 financial year.
The signing of the legislation marks a significant milestone in the implementation of the country’s devolved system of governance, as it provides the legal framework required for the National Treasury to begin disbursing the funds to county governments.
The 428 billion shillings represents 20.9 per cent of the most recently audited national revenue, exceeding the 15 per cent minimum required under the Constitution.
The allocation is expected to finance key devolved functions including healthcare, agriculture, county roads, water and sanitation services, trade development, and early childhood development education (ECDE), sectors that directly affect millions of Kenyans.
“The County Allocation of Revenue Bill provides for the equitable allocation of nationally raised revenue among county governments for the 2026/2027 financial year,” State House said following the President’s assent.
The approval comes at a critical time, with several county governments having raised concerns over delayed transfers from the National Treasury, which they said had disrupted service delivery, stalled development projects, and delayed payments to contractors, suppliers and employees.
Governors, through the Council of Governors, have repeatedly warned that cash flow challenges were affecting the provision of essential services, particularly in the health sector, where delayed funding has impacted the procurement of medicines and payment of healthcare workers.
By signing the Bill into law, President Ruto has effectively unlocked the release of the funds, enabling counties to implement their budgets and sustain essential public services.
The equitable share forms part of Kenya’s constitutional revenue-sharing framework established under the Constitution of 2010, which created a devolved system of government aimed at bringing services closer to citizens and promoting equitable development across the country.
Under Article 202 of the Constitution, county governments are entitled to an equitable share of nationally raised revenue to enable them to perform the functions assigned to them under the Fourth Schedule of the Constitution. The annual County Allocation of Revenue Act operationalizes this constitutional requirement by specifying the amount each county will receive during a financial year.
The Sh428 billion allocation underscores the government’s continued commitment to strengthening devolution, widely regarded as one of the most transformative reforms introduced under the 2010 Constitution.
County governments rely heavily on the equitable share from the national government to finance recurrent expenditure, including salaries, as well as development projects such as construction of health facilities, markets, roads, water infrastructure and support for farmers.
The release of the funds is expected to ease financial pressures facing counties and accelerate the implementation of development programmes aimed at improving livelihoods and expanding access to essential public services across the country.
