NAIROBI, Kenya — The Cabinet has approved a key amendment to the Public Finance Management (Amendment) Bill, 2025, in a move designed to accelerate the flow of funds to counties and strengthen devolution.
The amendment proposes to split the County Governments Additional Allocations Bill into two separate laws — one addressing allocations from the national government’s share of revenue, and another covering donor-funded loans and grants.
According to the Cabinet, this structural change aims to eliminate bureaucratic delays that have historically disrupted county operations, delayed payment of staff, and stalled development projects across devolved units.
“The reform will guarantee timely disbursement of funds to counties and enhance efficiency in public finance management,” the Cabinet said in a statement following its Tuesday meeting at State House, Nairobi.
The new arrangement will allow Parliament to consider and approve the two Bills independently, avoiding the procedural bottlenecks that arise when donor-funded allocations are tied to the broader county disbursement process.
The Cabinet described the proposal as part of a broader fiscal reform agenda under the Bottom-Up Economic Transformation Agenda (BETA), aimed at empowering counties to deliver services and implement development programmes on time.
Analysts have long cited the delayed release of funds from the National Treasury as a major obstacle to effective service delivery in counties, leading to unpaid salaries, stalled infrastructure projects, and poor public service outcomes.
“This amendment will help counties plan better, execute projects faster, and enhance accountability,” said a senior official at the National Treasury familiar with the Bill.
The proposal is now expected to be tabled before Parliament for debate and approval before the end of the year.
Once enacted, the reform will mark one of the most significant adjustments to Kenya’s public finance law since the advent of devolution in 2013, aligning fiscal policy with the constitutional promise of equitable development.
