Senate scrutinises Ksh420B county allocation amid debt strategy shift
By Ndiritu Wanjiru, February 17, 2026The Senate has scrutinized Ksh420 billion county allocation proposed by the budget policy statement to the Senate.
This comes after the Budget Policy Statement proposes an allocation of Ksh420 billion to county governments, a figure based on audited revenues of Ksh1.9 trillion from the 2021/2022 financial year.
While considering the Budget Policy Statement at Parliament Buildings on Tuesday, February 17, 2026, the Senate Finance Committee, led by Mandera Senator Ali Roba, expressed significant concern regarding the nation’s shifting fiscal strategy, specifically the transition from a fixed debt ceiling to a more fluid debt-to-GDP ratio.
“The legislative manoeuvring risks stifling domestic growth by absorbing available credit. By shifting to the debt-to-GDP ratio, the government risks grounding out local borrowing for the private sector in the country despite public claims of wanting to bolster private investment. We will make our recommendations based on the reality of what is there right now,” Ali Roba submitted.
The Senate Committee warned that this manoeuvre risks stifling domestic growth by absorbing.
This proposal, unveiled to the Senate Standing Committee on Finance and Budget, marks a critical juncture in the fiscal relationship between the national and devolved levels of government.
The National Treasury’s recommendation comes amid a national budget estimated at KSh4.18 trillion. While intended to sustain essential services, the figure has ignited robust debate.
CoG raises concerns over reduced allocation
The Council of Governors (CoG) has voiced reservations, noting that the KSh420 billion falls short of growing financial obligations, a position supported by the Commission on Revenue Allocation (CRA), which recommended KSh458.94 billion.
In a statement posted by the parliament on its social media, it has been noted that the discrepancy highlights the tension between the Treasury’s push for fiscal consolidation, aimed at a deficit of 4.6% of GDP, and the counties’ demand for resources that reflect the actual cost of healthcare, agriculture, and infrastructure.
As the Division of Revenue Bill proceeds through Parliament, the focus remains on striking a balance between national debt sustainability and the constitutional mandate to support devolution.
The battle over the division of revenue allocation to counties is set to commence in earnest following the National Treasury’s submission of the 2026/2027 Budget Policy Statement (BPS) to the Senate.