DNK International By Our Reporter, Nairobi.
The Commission on Revenue Allocation (CRA) has proposed that county governments receive Sh458.74 billion as their equitable share in the 2026/2027 financial year, setting the stage for a fresh standoff with the National Treasury over funding for devolved units.
The recommendation is significantly higher than the Sh420 billion proposed by the Treasury in its Budget Policy Statement, and slightly above the Sh450 billion being demanded by the Council of Governors (CoG), which argues that the Treasury’s figure is inadequate to meet the rising costs of healthcare and other devolved functions.
Treasury has defended its proposal, saying the Sh420 billion represents 21.87 per cent of the last audited national revenue, well above the constitutional minimum requirement of 15 per cent. However, CRA maintains that counties deserve a larger share, citing growth in national revenue and the need to strengthen service delivery at the grassroots.
According to CRA projections, shareable revenue will rise from Sh2.6 trillion to Sh2.98 trillion in the next fiscal year—an increase of Sh342.6 billion. Based on this, the commission recommends that Sh2.5 trillion be allocated to the national government, while Sh458.7 billion goes to counties as equitable share.
In addition, counties are set to receive Sh9.6 billion under the Equalisation Fund, targeting historically marginalised regions to help bridge development gaps.
A key component of the increased allocation is an additional Sh43.9 billion, comprising Sh35 billion in revenue growth adjustment and Sh8.94 billion transferred from the national government’s share to cater for Universal Health Coverage (UHC) workers. This follows a presidential directive to transition UHC workers to permanent and pensionable terms effective September 1, 2025.
The Ministry of Health, in consultation with the CoG, agreed on the Sh8.9 billion budget based on Salaries and Remuneration Commission (SRC) rates, with CRA recommending that Parliament provide the funds through the Division of Revenue Act for 2026/27.
“The Commission recommends that Sh8.94 billion be added to the counties’ equitable share for the financial year 2026/27 to fully transition the UHC workers,” CRA noted.
Under the proposed allocations, Nairobi County would receive the largest share at Sh23.7 billion, followed by Nakuru (Sh15.9 billion), Turkana (Sh15.1 billion), Kakamega (Sh14.9 billion), Kiambu (Sh14.56 billion), Kilifi (Sh14.0 billion) and Mandera (Sh13.2 billion).
Other notable allocations include Bungoma (Sh13.1 billion), Kitui (Sh12.6 billion), Meru (Sh11.7 billion), Wajir (Sh11.6 billion), Machakos (Sh11.28 billion), and Narok and Kisii (Sh10.7 billion each).
Mid-range beneficiaries include Kwale and Kajiado (Sh9.94 billion each), Uasin Gishu and Garissa (Sh9.9 billion each), Kisumu, Migori and Makueni (Sh9.8 billion each), Homa Bay (Sh9.5 billion) and Mombasa (Sh9.3 billion). Marsabit would receive Sh9.0 billion, while Nandi is allocated Sh8.5 billion.
Smaller allocations include Murang’a (Sh8.82 billion), Trans Nzoia (Sh8.8 billion), Siaya (Sh8.6 billion), Busia (Sh8.7 billion), Bomet (Sh8.2 billion) and Kericho (Sh8.0 billion). At the lower end, Tharaka Nithi would receive Sh5.6 billion, while Lamu, the smallest county, is allocated Sh4.2 billion.
CRA says the proposed distribution is based on the Fourth Basis for Revenue Sharing, as mandated under Section 190(1)(b) of the Public Finance Management Act. The commission also warns that despite steady revenue growth, revenue sharing has increasingly favoured the national government at the expense of counties.
“Over time, the proportion of revenue allocated to the national government has substantially increased, while the share going to county governments has continued to shrink,” CRA observed.
The recommendations now await consideration by the National Assembly and the Senate, whose approval would pave the way for one of the largest allocations to counties since the advent of devolution.
[DNK-International@February 1,2026]
