Revenue Talks Stall as Mediation Team Fails to Strike Deal

NAIROBI, Kenya– The mediation team tasked with resolving the stalemate on the equitable revenue allocation to counties has failed to reach an agreement, further deepening the standoff between the National Assembly and the Senate.

The National Assembly is sticking to its proposal of allocating counties Sh408 billion, while Senators remain firm on their push for a higher allocation of Sh435 billion, citing rising county obligations and inflationary pressures. Talks are expected to resume tomorrow in a final attempt to break the deadlock.

The disagreement has triggered fresh tensions, with some county leaders expressing frustration over what they perceive as the National Assembly’s disregard for devolved units’ financial needs.

Earlier, governors threatened to walk out of the negotiations altogether, accusing the National Assembly of negotiating in bad faith.

Council of Governors Chairperson Ahmed Abdullahi warned that if a consensus is not reached that reflects the counties’ increasing responsibilities, they would have no choice but to “boycott further talks and escalate the matter to the courts.”

“It will be pointless to attend such negotiations if the allocation for the 2025/2026 financial year is anything to go by. As the Council of Governors (CoG), we had proposed Sh536 billion as the equitable revenue share for counties.

However, according to the budget estimates presented by National Treasury Cabinet Secretary John Mbadi, counties have been allocated only KSh405 billion,” he said.

The Council is backing the Senate’s Sh435 billion demands, arguing that counties are grappling with growing wage bills, healthcare responsibilities under UHC, and stalled development projects due to late or insufficient disbursements.

Under the Constitution, the Division of Revenue Bill requires approval by both Houses.

When they disagree, a mediation committee made up of members from both chambers is appointed to reconcile their positions. However, today’s impasse marks a significant setback as the end-of-fiscal-year deadline looms.

Negotiations are expected to continue tomorrow, though the path to consensus remains uncertain, especially with county governments threatening legal action and political temperatures rising.

If no agreement is reached soon, the stalemate could delay the budgetary process and paralyze county operations at the start of the new financial year.