County governments will receive Sh415 billion in equitable share for the 2025/26 financial year following a breakthrough deal between Members of Parliament and senators, ending weeks of budget gridlock.
The agreement, announced Wednesday by the mediation committee handling the Division of Revenue Bill, resolves a standoff that had threatened to delay the national budget process. The new allocation represents a Sh27.6 billion increase from the current Sh387.4 billion and is Sh10 billion more than the National Treasury’s earlier proposal of Sh405.1 billion.
“This agreement is a crucial step in finalising the national budget and ensuring fair and equitable distribution of resources for the upcoming financial year,” the mediation committee said in a statement.
The deal was reached during the committee’s fourth sitting, which brought together representatives from both the National Assembly and the Senate.
The initial deadlock emerged after sharp differences in proposed allocations: the National Assembly supported the Treasury’s position of Sh405.1 billion, citing limited revenue projections under the Finance Bill 2025 and broader economic constraints. On the other hand, the Senate pushed for Sh465 billion, arguing that counties need more funds to manage newly devolved functions.
Mandera Senator Ali Roba had attempted to bridge the gap by proposing a compromise figure of Sh435 billion during Senate deliberations on Monday, June 16.
“All additional functions transferred from the national government to county governments should be accompanied by the necessary funding to ensure that counties are adequately resourced,” said Senator Roba.
However, Budget and Appropriations Committee Chairperson Samuel Atandi (MP for Alego Usonga) rejected that figure, stating that the fiscal environment could not support such an increase.
“It would be hard to allocate Sh435 billion to counties given the current financial constraints experienced in the economy,” said Atandi.
“Since the Finance Bill 2025 is not generating much revenue for the country, it would be catastrophic to allocate more money to counties, which we do not currently have.”
The nearly Sh60 billion difference between the two Houses’ proposals had raised fears of a legislative stalemate that would disrupt the budget timetable.
With consensus now reached, the harmonised version of the Division of Revenue Bill, 2025 will be tabled for debate and passage in both the Senate and the National Assembly. The National Assembly is expected to introduce the final version on the floor later today.
