NAIROBI, Kenya — The Mediation Committee, considering the Division of Revenue Bill, 2026, has made significant progress towards resolving a standoff between the National Assembly and the Senate over the equitable share of revenue allocated to county governments.
The joint committee, co-chaired by Samuel Atandi and Ali Roba, reported growing consensus as legislators sought a compromise on the fiscal framework underpinning county funding.
At the heart of the discussions is Clause 5 of the Bill, a provision designed to protect counties from sudden expenditure cuts arising from national revenue shortfalls.
Clause 5 gains support
Senator Roba emphasized the importance of the provision, arguing that county governments have limited options when faced with funding reductions.
“The purpose of Clause 5 is to insulate counties from arbitrary expenditure cuts due to revenue shortfalls. This clause is critical as it gives effect to Article 219 of the Constitution,” Roba said.
He noted that, unlike the national government, counties have little flexibility to borrow and absorb unexpected financial shocks.
Atandi confirmed that the National Assembly had agreed in principle to reinstate the clause following consultations with the National Treasury.
“We are here to undertake a constitutional responsibility. The economy is not capable of raising sufficient revenue to meet all competing demands. We must be realistic,” he said.
Senator Tabitha Mutinda welcomed the agreement, describing it as a major milestone in enhancing predictability and stability in county budgeting.
Gap narrows on county allocation
Negotiators have also made progress in narrowing the gap on the amount of revenue to be allocated to counties.
The National Assembly initially proposed Sh420 billion, while the Senate sought Sh450 billion.
Atandi revealed that the National Assembly had revised its position upwards to Sh425 billion.
“We have moved from Sh420 billion to Sh425 billion on our side. We believe this is factual and realistic given the revenue environment,” he said.
The Senate has also softened its stance, with Roba proposing Sh440 billion as a compromise figure.
“The counties will smile at Sh440 billion. We are aware of the economic situation, but we must still support devolution,” he said.
Senators push for stronger county funding
Senator Eddy Oketch argued that counties require even greater support, citing development needs and outstanding financial obligations.
According to Oketch, technical assessments suggest that county governments require approximately Sh445 billion to adequately meet their mandates.
He pointed to stalled development projects and pending obligations, including arrears owed under the Equalisation Fund, as reasons for increasing allocations.
Other lawmakers, including Mwengi Mutuse and Christopher Aseka, urged colleagues to seek common ground while taking into account revenue constraints and global economic pressures.
Mutuse proposed that any future revenue surpluses could be addressed through supplementary adjustments to the Division of Revenue framework.
Further consultations planned
In closing remarks, Roba said both Houses had demonstrated goodwill throughout the mediation process and expressed optimism that a final agreement is within reach.
“We have made significant progress from Sh450 billion to Sh440 billion and from Sh420 billion to Sh425 billion. We adjourn and reconvene tomorrow at 1.00pm. Whatever we agree here must pass both Houses,” he said.
The committee agreed to undertake further consultations before reconvening, expressing confidence that consensus will be reached in time to facilitate enactment of the Division of Revenue Bill, 2026.
