NAIROBI, Kenya — President William Ruto has assented to the Division of Revenue Bill, 2026, clearing the way for county governments to receive Sh428 billion as their equitable share of nationally raised revenue in the 2026/27 financial year.
The signing, conducted at State House, Nairobi, marks the conclusion of months of negotiations between the National Assembly and the Senate over the allocation of resources to devolved units.
The legislation, formally known as the Division of Revenue Bill, 2026, establishes how revenue collected nationally will be shared between the national and county governments in accordance with Articles 202, 203, and 218 of the Constitution.
Under the new law, counties will receive Sh428 billion, representing 21 per cent of the most recent audited national revenue of Sh2.05 trillion. The allocation exceeds the constitutional minimum threshold of 15 per cent stipulated under Article 203(2) of the Constitution.
The allocation also reflects an increase of Sh13 billion compared to the Sh415 billion allocated to counties in the 2025/26 financial year.
In addition, the law sets aside Sh10.25 billion for the Equalisation Fund, equivalent to 0.5 per cent of the audited revenue approved by Parliament. The fund is intended to support historically marginalized areas by improving access to basic services, including water, roads, health facilities and electricity.
The enactment follows a lengthy legislative process that began when the Budget and Appropriations Committee Chairperson, Samuel Atandi, introduced the Bill in the National Assembly on February 19, 2026.
The National Assembly passed the measure with amendments on March 10 before forwarding it to the Senate, which approved its own version on May 12. Differences between the two Houses, particularly regarding the size of the county allocation, triggered a mediation process.
A joint mediation committee eventually reached a consensus on June 9, paving the way for approval by both Houses on June 10 and subsequent presidential assent.
Parliament said the additional funding is expected to strengthen county governments’ capacity to deliver devolved services and support development priorities across the country.
“It is anticipated that the enhanced allocation shall enable county governments to plan, budget, and spend in key priority areas and facilitate the equitable provision of services to all citizens,” a parliamentary brief accompanying the Bill stated.
The law comes at a time when the government is under pressure to balance competing fiscal demands, including rising debt-servicing obligations under the Consolidated Fund Services and increasing calls for improved public service delivery.
County governments are expected to channel the additional resources toward key devolved sectors such as healthcare, agriculture, early childhood education, water services, and local infrastructure.
The assent of the Division of Revenue Bill also unlocks the next stage of the budget-making process, including the passage of the Appropriations Bill, 2026, and the County Allocation of Revenue Bill, 2026, both of which are required to operationalise spending plans for the new financial year.
