NAIROBI, Kenya – A fresh dispute over county funding has erupted between the National Treasury and the Commission on Revenue Allocation (CRA), setting the stage for a heated debate in Parliament.
At the heart of the standoff is a Sh12.3 billion gap between the two institutions’ recommendations on the equitable share of revenue for counties in the 2025-26 financial year.
Treasury has proposed Sh405.1 billion—an increase from the current Sh387.5 billion—while CRA insists counties should receive Sh417.4 billion.
“The commission has recommended an equitable share allocation to county governments of Sh417.4 billion for 2025-26,” CRA stated in its submission to Parliament.
CRA argues that its proposed increase is necessary to cushion counties from revenue losses as the country transitions to a new revenue-sharing formula under the Fourth Basis, which will be in effect from 2025-26 to 2029-30.
According to the commission, the formula includes a stabilization mechanism to ensure no county receives less than its 2024-25 allocation.
On the other hand, Treasury Cabinet Secretary John Mbadi has backed a lower increase, justifying it with additional allocations outside the equitable share.
Treasury’s proposal includes Sh12 billion in extra funding, with Sh10.5 billion earmarked for the Equalisation Fund, which supports development projects in marginalized areas.
Other allocations include Sh1.7 billion for doctors’ salary arrears, Sh11.5 million from court fines, and a portion of mineral royalties.
While both entities agree on increasing county funding, their differing figures will likely spark a political showdown in Parliament, where lawmakers will have the final say on the allocation.
The debate comes at a critical time, as counties push for more resources to sustain devolved services amid rising financial demands.
