The Bill provides for the equitable division of revenue among all 47 counties and provides a framework for managing county functions.
It operationalises the Division of Revenue Act, 2026, which has allocated Ksh.428 billion to counties, by distributing the county government’s share of nationally raised revenue to counties.
The allocation marks a Ksh.13 billion increase from the Ksh.415 billion allocated to counties in the 2025/2026 Financial Year.
President Ruto said that the formula will strengthen devolution by providing a stable baseline allocation while ensuring a fair distribution based on equal share, population, poverty level and geographical size.
It also sets out the responsibilities of both the National and County governments in relation to the allocated funds.
County Executives will be required to determine the cost of all transferred functions to the counties, and the County Assembly must then appropriate funds for the transferred function, with the allocation being not less than the amount provided in the previous Fiscal Year.
Likewise, it imposes accountability obligations by requiring the national government entity performing the transferred functions to submit quarterly reports to the Senate and the respective County Assembly on the implementation of the funds.
Each county has a respective allocated share, and Treasury Cabinet Secretary John Mbadi will be required to publish a Schedule setting out the transfers made to the counties from the consolidated fund.
This timely enactment sets out budget ceilings for recurrent expenditure to ensure a fair balance between recurrent expenses and development expenditure.
Under the allocation formula, Ksh.387.43 billion will be distributed through the Baseline Allocation to support the day-to-day operations and development programmes of County Governments.
A further Ksh.4.46 billion has been earmarked as an Affirmative Action Allocation to benefit 12 historically marginalised counties, helping bridge development gaps and promote equitable growth across the country.
Additionally, Ksh.36.1 billion will be shared using a weighted formula that takes into account population, poverty levels, income distance and geographical size, ensuring that counties with greater development needs receive additional support.
The government has expressed optimism that the allocation will advance the implementation of development programmes aimed at improving livelihoods, creating economic opportunities and enhancing access to public services.
Some of the counties that will get the biggest share include Nairobi (Ksh.22.1B), Nakuru (Ksh.14.9B), Turkana Ksh.14.3B), Kakamega (Ksh.14.1B) and Kiambu (Ksh.13.5B).
