A standoff is looming between the two Houses of Parliament over the Division of Revenue Bill 2025, which could trigger a prolonged mediation process.

This is after the county chiefs rejected the Sh405 billion allocation in the Division of Revenue Bill 2025 as proposed by the National Treasury and adopted by the National Assembly for the 2025/26 financial year.

Appearing before the Senate Finance Committee, chaired by Mandera MP Ali Roba (pictured, the Council of Governors (CoG) demanded at least Sh536 billion.The

The Senate had proposed a compromise figure of Sh465 billion for the 2025-26 financial year.

According to the governors, the current proposal does not factor in inflation, county functions, and demand for devolved services.

The county chiefs further argued that the allocation has not included the unfunded discretionary functions to the tune of Sh73 billion, including Housing Levy deductions (Sh4 billion), National Social Security Fund (NSSF) Sh6 billion, matching funds for aggregation parks (Sh11 billion), matching funds for County Health Promoters (CHPs) (Sh3.3 billion) respectively.

They also cited the cost of procurement of new medical equipment (Sh39 billion), annual wage increments (Sh6.3 billion) and doctors’ salary adjustments (Sh3.45 billion), which they argued have not been factored into the allocation.

Revenue allocation

CoG Finance Committee chair Fernandes Barasa (Kakamega) was categorical that the Sh405 allocation was unacceptable.

“We urge the Senate to review the resource allocation framework to align with the macroeconomic and growth trends,” said Barasa.

According to Barasa, while the share of revenue to the national government has grown significantly (by an annual average of Sh700 billion), while that of counties has stagnated.

Makueni Governor Mutula Kilonzo Jr accused the national government of diverting funds meant for counties to politically motivated projects, adding that the move undermines counties’ autonomy and creates unnecessary bureaucracy.

“The Senate has fought for devolution, but governors must also engage the National Assembly directly,” said Roba.

Tabitha Mutinda (nominated) warned that failing to address the disparities would deepen inequalities and erode public trust in devolution. 

She asked Treasury officials to explain why the Equalisation Fund meant for marginalized regions was underfunded by Sh10.4 billion.

Commission on Revenue Allocation (CRA), also joined the governors in rejecting the Sh405 billion.

CRA chairperson Mary Chebukati had earlier recommended Sh417 billion, but even that middle-ground suggestion was ignored by the National Assembly and Treasury.

Ms Chebukati told senators that the national government’s excuse that some of the funds were serving national interest does not hold.