Senate Softens Stance in Revenue Talks, Agrees to Sh425 Billion for Counties

NAIROBI, Kenya – Senators have backed down from their earlier push for Sh447 billion, now supporting a reduced allocation of Sh425 billion to county governments in the 2025/26 financial year. 

The concession marks a potential turning point in Kenya’s prolonged revenue sharing standoff.

The move follows a series of tense mediation sittings between the National Assembly and the Senate, which previously failed to yield a unified position on the Division of Revenue Bill.

The mediation team had been formed to reconcile the Senate’s push for Sh447 billion and the National Assembly’s Sh391 billion ceiling.

The breakthrough appears to rest on a technical interpretation;since key functions like health and agriculture are fully devolved, proponents of the higher allocation argue that if these budgets are properly routed to counties, the Sh425 billion figure becomes realistic and achievable without straining national coffers or requiring new tax measures.

The compromise could pave the way for smoother county operations and avert a looming fiscal crisis in the devolved units, many of which are already struggling to stay afloat.

Yesterday,mediation talks nearly collapsed after both Houses stood their ground. 

The Senate had maintained that counties required a larger share to effectively deliver devolved services, while the National Assembly cited Kenya’s ballooning public debt and limited fiscal space, insisting on a lower Sh410 billion figure.

National Assembly members have also opposed introducing new revenue-raising measures, a stance that further narrows the options for expanding the allocation to counties.

With the June 30 budget deadline fast approaching, the coming days will be critical in determining whether the two Houses can settle on a final figure and unlock funds vital for the functioning of county governments.