The Council of Governors (CoG) has raised fresh concerns over Kenya’s rising public debt burden, warning that the growing cost of debt servicing is squeezing resources needed to sustain devolution.

CoG, in a statement shared via its official X account on Thursday, February 19, 2026, said that the governors had engaged in a consultative meeting with the Senate Standing Committee on Finance and Budget, where they deliberated on the 2026 Budget Policy Statement (BPS) and the 2026 Medium-Term Debt Management Strategy (MTDS), urging urgent fiscal reforms to protect county operations.

“The Council of Governors today engaged the Senate Standing Committee on Finance and Budget in a consultative meeting to deliberate on the 2026 Budget Policy Statement (BPS) and the 2026 Medium-Term Debt Management Strategy (MTDS),” CoG stated.

Debt pressure mounting

The Council expressed alarm over the continued breach of the government’s 55 percent debt anchor, noting that debt servicing now consumes about 53 percent of ordinary revenue.

Governors contrasted this with the counties’ share, which stands at 14 percent, despite county governments not directly contributing to the country’s public debt stock.

“The Council raised concern over the continued breach of the 55% debt anchor and the growing cost of debt servicing, which now consumes 53% of ordinary revenue, compared to Counties’ 14%, despite Counties not contributing directly to the public debt stock,” the statement read in part.

The CoG warned that the current trajectory risks undermining service delivery and weakening the foundations of devolution.

Falling county transfers

The governors also flagged a declining trend in county transfers as a share of GDP, cautioning that the pattern threatens the stability, predictability, and sustainability of devolved governance.

They argued that shrinking allocations could hamper counties’ ability to fund critical services such as health, agriculture, and local infrastructure.

“The Council also highlighted the declining trend of County transfers as a share of GDP, warning that this threatens the stability, predictability and sustainability of devolved governance,” the council stated.

Key demands

To safeguard service delivery across the 47 counties, the Council proposed a raft of measures, including an equitable share allocation of Ksh534.96 billion for the 2026/27 financial year, inclusion of Universal Health Coverage (UHC) workers’ transition costs within the Division of Revenue, transfer of Ksh65.97 billion tied to clearly delineated devolved functions, and urgent measures to restore debt sustainability.

“To safeguard service delivery across the 47 Counties, the Council proposed an equitable share allocation of Ksh.534.96 billion for FY 2026/27, inclusion of UHC workers’ transition costs within the Division of Revenue, transfer of Ksh65.97 billion tied to delineated devolved functions, and urgent measures to restore debt sustainability. Sustainable devolution depends on adequate, predictable, and timely resourcing,” CoG stated.