MPs Back Sh420 Billion Allocation To Counties Amid Budget Pressure
Lawmakers, however, cautioned that fiscal pressures remain high due to weak revenue performance and growing debt servicing costs.
By Staff Writer
Counties will receive Sh420 billion in equitable share funding in the 2026/27 financial year after Parliament backed the allocation in its review of the government’s Budget Policy Statement.
The funding proposal was announced by the National Assembly Budget and Appropriations Committee, which reviewed the country’s medium-term fiscal framework.
The committee said the allocation complies with the Constitution, which requires at least 15 percent of nationally raised revenue to be transferred to county governments.
“The total shareable revenue for FY 2026/27 is projected at Sh2.901 trillion, of which Sh420 billion is allocated to county governments,” the committee said.
Lawmakers, however, cautioned that fiscal pressures remain high due to weak revenue performance and growing debt servicing costs.
“The committee noted that increasing revenue underperformance and rising debt servicing costs were key factors influencing the Sh420 billion allocation to counties,” the report states.
Besides the equitable share, counties are also expected to receive Sh75.69 billion in additional allocations from the national government and development partners for targeted programmes.
These funds will support devolved functions including health services, community health programmes and the transition of Universal Health Coverage workers.
The committee also warned that delays in disbursing funds to counties continue to disrupt services and worsen pending bills.
By the end of the 2024/25 financial year, counties had accumulated about Sh183 billion in pending bills, raising concerns over fiscal discipline in devolved units.
Lawmakers urged the National Treasury to improve revenue forecasting and ensure timely transfers to counties to safeguard service delivery.
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