Parliament has approved the Division of Revenue Bill, 2025, allocating Sh415 billion to county governments in the upcoming 2025/2026 financial year.
The bill, which has now been forwarded to President William Ruto for assent, marks a major milestone in the ongoing effort to strengthen devolution and ensure counties have the resources they need to deliver services.
The allocation reflects a Sh15 billion increase from the previous year’s figure of Sh400 billion. According to the government, the increment aims to enhance service delivery at the county level, especially in key sectors such as health, agriculture, and early childhood education.
During debate in the Senate, lawmakers emphasized the need for counties to use the funds prudently and prioritize development projects that directly benefit citizens. Senate Finance Committee members urged counties to improve their own-source revenue generation to reduce overreliance on national transfers.
Treasury officials have also called on county governments to ensure timely absorption of funds and proper reporting in line with the Public Finance Management Act. This, they argue, will enhance accountability and reduce delays in service delivery.
In the 2025 Budget Policy Statement, the National Treasury highlighted that equitable distribution of revenue is critical for achieving national development goals. It also noted that the national government will continue supporting counties through conditional grants and infrastructure funds.
With the Division of Revenue Bill now passed, the focus shifts to the County Allocation of Revenue Bill, which will determine how the Sh415 billion will be shared among the 47 devolved units. Governors have welcomed the move, terming it a step in the right direction, but have also urged the Treasury to disburse the funds on time to avoid delays in implementing county budgets.
The Council of Governors has reaffirmed its commitment to working with the national government to ensure efficient use of the resources and deliver tangible results for the Kenyan people.
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