Counties to receive Sh428 billion boost after MPs approve Revenue Bill

The National Assembly’s recent passage of the County Allocation of Revenue Bill 2026 marks a critical milestone in Kenya’s fiscal decentralization, authorizing the disbursement of Sh428 billion as the equitable share for the 47 devolved units for the 2026/27 financial year. This legislative action follows intense negotiations between the National Treasury, the Commission on Revenue Allocation, and the Council of Governors, ensuring that counties have the necessary liquidity to fund essential services, including healthcare, infrastructure, and agriculture. By formalizing this allocation, the legislature has averted potential service delivery paralysis that often accompanies delays in the division of revenue process, providing a stable financial roadmap for county governments to execute their budgetary mandates.

From a legal perspective, this development is rooted in Article 203 of the Constitution of Kenya, which mandates the equitable division of revenue raised nationally between the national and county governments. The process is governed by the Division of Revenue Act, which precedes the allocation bill, ensuring that the fiscal framework aligns with the constitutional requirement for a fair distribution of resources. The High Court and the Senate play pivotal roles in overseeing these fiscal disputes, often serving as the final arbiters when disagreements arise between the two levels of government regarding the adequacy of the equitable share. The passage of this bill underscores the supremacy of the legislative process in balancing national fiscal policy with the constitutional autonomy of devolved units.

For legal practitioners and businesses operating within the devolved space, this development signals a period of increased procurement activity and potential contractual opportunities at the county level. Attorneys representing contractors or service providers should monitor the subsequent County Appropriation Acts, as these will dictate the specific sectoral spending priorities and payment schedules for the upcoming fiscal year. It is essential for legal teams to ensure that all county-level contracts are strictly aligned with the approved budget estimates to mitigate the risk of non-payment or litigation arising from unauthorized expenditure. Practitioners should also advise clients to conduct thorough due diligence on county procurement processes, as the influx of funds often triggers heightened scrutiny from the Office of the Auditor General and the Ethics and Anti-Corruption Commission.