A fresh deadlock has emerged between the Senate and the National Assembly over the allocation of funds to county governments, threatening to delay the finalization of the Division of Revenue Bill, 2026.
Despite recent mediation efforts aimed at bridging differences between the two houses, negotiators remain divided over how much money counties should receive as their equitable share for the 2026/2027 financial year.
The National Assembly has slightly increased its offer from Sh420 billion to Sh425 billion, a move lawmakers say reflects the realities of the country's constrained fiscal position. Legislators argue that the national government is facing revenue limitations and cannot sustainably support a significantly higher allocation without straining public finances.
On the other hand, the Senate has softened its initial position but continues to push for a larger share of Sh440 billion for counties. Senators maintain that devolved units are grappling with rising operational costs, increased wage obligations, and the need to finance development projects that require counterpart funding from local governments.
The disagreement has left a multi-billion-shilling gap between the two proposals, prolonging negotiations and raising concerns about the timely implementation of county budgets. County governments rely heavily on allocations from the national government to finance essential services, including healthcare, agriculture, infrastructure development, and early childhood education.
Senators argue that without additional funding, counties may struggle to meet growing demands from residents and implement recommendations issued by the Salaries and Remuneration Commission. They also warn that inadequate funding could jeopardize donor-supported programmes that require county contributions.
Meanwhile, members of the National Assembly insist that fiscal discipline must guide the budgeting process. They contend that the country's revenue collection targets and broader economic conditions do not support the higher allocation sought by the Senate.
As mediation talks continue, both houses face mounting pressure to reach a compromise that balances the financial needs of county governments with the realities of Kenya's national budget. Until an agreement is reached, uncertainty remains over the final amount that will be allocated to counties in the upcoming financial year.
Source Attributed: Nation Newspaper