A protracted stalemate over the division of national revenue between Kenya’s two tiers of government came to an end on Monday after President William Ruto signed the Division of Revenue Bill, 2026 into law. The new legislation allocates Sh428 billion to county governments as their equitable share.
The signing ceremony, which took place at State House, was witnessed by Deputy President Kithure Kindiki, National Assembly Speaker Moses Wetang’ula, Senate Speaker Amerson Kingi, Attorney General Dorcas Oduor, and several Cabinet Secretaries.
The breakthrough followed the National Assembly’s approval of a mediated version of the Bill, ending months of disagreement between the National Assembly and the Senate over the annual revenue-sharing formula. The two chambers had earlier clashed over the figure: the National Assembly proposed a Sh420 billion ceiling, while the Senate pushed for more than Sh450 billion, arguing that counties required additional resources to enhance service delivery.
A mediation committee eventually brokered a compromise that satisfied both sides, striking a balance between national fiscal constraints and the funding needs of devolved units.
According to the new revenue framework, total shareable revenue stands at Sh2.901 trillion. The national government will retain Sh2.464 trillion, while counties receive Sh428 billion as their equitable share. An extra Sh10.25 billion has been set aside for the Equalisation Fund, which targets marginalized and underserved areas to improve access to basic services and infrastructure.
The agreement is expected to bring greater stability to intergovernmental fiscal relations ahead of the 2026/27 budget implementation period. County administrations had repeatedly warned that delays in approving the revenue-sharing formula could disrupt planning and hamper critical services in health, agriculture, roads, and early childhood development.
Meanwhile, Treasury Cabinet Secretary John Mbadi has indicated that counties will receive a total of Sh502 billion in the coming financial year. While presenting the national budget in Parliament on June 11, 2026, Mbadi clarified that this sum comprises the Sh428 billion equitable share plus Sh74 billion in traditional allocations from the national government’s share of revenue, loans, and development partner grants.
