The Council of Governors (CoG) wants the shareable revenue increased by Sh131.82 billion from Sh405.1 billion to Sh536.88 billion.

In a presentation on the Division of Revenue Bill 2025 currently undergoing public participation before the Budget and Appropriations Committee (BAC) chaired by Alego Usonga MP Sam Atandi, CoG explained that their push for the increment is because the economy is projected to grow at 5.3 per cent in the next financial year as well as remain stable over the medium term.

The county chiefs also argued that their push is because the projected shareable revenue has grown by 7.78 per cent, which should be equitably allocated.

To effect the increment, Kakamega Governor and CoG finance chair Fernandes Barasa and his Nandi counterpart Stephen Sang proposed that the share to the National Government be reduced from the proposed Sh2.4 trillion in the Division of Revenue (DoR) to Sh2.29 trillion while the allocation to the Equalisation Fund should be Sh7.8 billion.

The duo said it is unacceptable that in the allocation of monies to counties the baseline allocation for counties’ equitable share is Sh387.425 billion as opposed to the initial allocation of Sh400.117 billion, yet the central government’s allocation had been enhanced through the recent Supplementary Budget, which points to improved revenue projections negating what informed the cuts.

More money

“We note that despite the expanded fiscal space and projected stable economic growth at 5.3 per cent over the medium-term, the same does not reflect on Division of Revenue between the two levels of government. The proposed counties equitable share allocation is not in sync with the growth trends in both Ordinary Revenues and GDP,” Barasa argued, while urging the National Assembly to review the resource allocation framework so that it aligns with the macroeconomic and growth trends.

“To realise this, the Council proposes for a minimum allocation of Sh536.88 billion for FY 2025/26,” he added.

The sentiments by Barasa come after the Division of Revenue Bill proposed that out of the projected total shareable revenue for the FY 2025/26 of Sh2.8 trillion, Sh2.4 trillion should go to the National Government, Sh405 billion to the County Governments, and Sh10.6 billion to the Equalisation Fund.

The allocation of Sh405.1 billion to county governments represents an increase of Sh17.7 billion (4.5 per cent growth) from the previous allocation of Sh387.4 billion.

The Division of Revenue Bill 2025 was published on March 12, 2025 and read for the first time in the House on March 14, 2025. Orange Democratic Movement (ODM) is on record that in the 2025/26 financial year counties should be allocated Sh450 billion.

Yesterday in his presentation, Barasa regretted that between the financial years, 2020/21 and 2024/25, counties equitable share has only grown by a marginal Sh70.9 billion yet ordinary revenue has grown from Sh1.8 trillion to 2.6 trillion and now projected at Sh2.8 trillion for Financial year 2025/26.

He regretted that in the financial year 2024/25, county governments suffered a Sh14 billion budget cut in shareable revenue despite having numerous non-discretionary obligations that remain unmet thus constraining the governments’ capacity to finance the programmes, a move that compromised their implementation and service delivery to citizens.

Most of the obligations, he said, are due to policy changes by the national government such as the enhanced contributions to National Social Security Fund (NSSF) which has doubled and the rollout of the Universal Health Coverage.
There are other national government priority projects such as Affordable Housing, County Aggregation and Industrial Parks as well as Community Health Promoters compensation.

Recent changes

Further, he regretted that the Division of Revenue, 2025 had not considered the recently delineated and gazetted functions of the national and county governments, which have a financial implication and called for an urgent identification of the attendant resources from the current budget as a baseline allocation and transfer the same to the Counties.

“This aligns with the 11th National and County Governments Coordinating Summit resolution that the corresponding resources related to the unbundled and gazetted functions shall be transferred to the county governments commencing July 2025,” he argued, while attaching and analysis of allocations to national government MDAs for devolved functions based on FY2024/25 budget.