Counties face budget cuts as MPs, Senators clash over revenue sharing
By Rawlings Otieno, June 17, 2025County governments are poised to lose billions of shillings in revenue equitable sharing for the 2025-2026 financial year after lawmakers failed to agree on how much should be allocated to them.
On the second day of negotiations between the Senate and the National Assembly, senators made a significant concession, reducing their proposed allocation to counties from Ksh465 billion to Ksh430 billion.
In contrast, the National Assembly slightly increased its proposed allocation from Ksh405.1 billion to Ksh409.5 billion—a marginal Ksh4 billion increment, while the Senate has conceded Ksh37 billion.
The mediation committee, co-chaired by Senate Budget and Finance Committee Chairperson Ali Roba (Mandera) and his National Assembly counterpart, Samuel Atandi (Alego Usonga), comprises 18 members, nine from each House.
During the June 16, 2025, negotiations, Senators Boni Khalwale (Kakamega), William Kisang (Elgeyo Marakwet), Richard Onyonka (Kisii), Eddy Oketch (Migori) and Tabitha Mutinda (nominated) called out their National Assembly counterparts, accusing them of holding brief for the National government.
“When you are here, you should be representing the National Assembly and not the National Government. If we do not allocate more money to the counties, smaller counties will continue to pay salaries without any meaningful development,” said Kisang.
According to Khalwale, primary healthcare has been devolved, and there is more than Ksh133 billion, Ksh120 billion for Housing, functions which are devolved.
“I have not been persuaded as to why the National government should retain Ksh133 billion for health, yet primary healthcare is devolved. We are not climbing down any further. It is Ksh428 billion or nothing less,” said Khalwale.
However, National Assembly members Owen Baya (Kilifi North), Maryanne Kitany (Aldai), Robert Pukose (Endebes) and George Kariuki (Ndia) charged that the fiscal space of the economy does not allow for an increase in allocation beyond Ksh409.5 billion.
National Assembly representatives defended their proposal as pragmatic, citing dwindling revenue collection by the Kenya Revenue Authority (KRA).
According to Atandi, counties have been allocated more than Ksh22 billion in the Division of Revenue Bill, 2025, adding that the amount should be used to cater for the non-discretionary expenditure.
“We should note that we are increasing the allocation from the current Ksh387 billion to Ksh409 billion. This is about Ksh22 billion, which counties can use for non-discretionary expenses. We cannot get more than Ksh22 billion,” said Atandi.
The team held its first sitting on Friday, aiming to fast-track the passage of the Division of Revenue Bill, 2025, and facilitate the timely disbursement of county funds for the financial year beginning July 1, 2025.
“Let’s make promises we know we can keep. We must consider how much we can realistically collect and deliver,” said Atandi.
Senators, however, dismissed their arguments, accusing the national government of centralising funds meant for devolved functions.