Clash as senators eye Sh465bn for counties

A standoff once again looms over the amount county governments should get in the next financial year, with senators clashing with the National Treasury.

In a move that could trigger a stalemate, the Senate Finance and Budget Committee has proposed the allocation of Sh465 billion to the devolved units in the next financial year.

The proposal is Sh60 billion more than the Sh405.1 billion proposed by the National Treasury. The two proposals differ from that of the Council of Governors, which has demanded an allocation of ShSh547 billion.

The committee has proposed an allocation of Sh2.35 trillion to the national government, down from Sh2.41 trillion. In a report on the Budget Policy Statement tabled on the floor, the committee led by Mandera Senator Ali Roba cited the projected growth in the economy and billions meant for devolved functions still being held by the national government, for its recommendation.

“The ordinary revenue is projected to grow by 10 per cent (an increase of Sh259 billion). Despite this, the county equitable share for FY 2025-26 is proposed to increase by only Sh17.7 billion,” the report states.

“This does not align proportionally with the growth in sharable revenue, thus limiting the abilities of counties to adequately finance devolved functions.”

The report goes on to say that the National Treasury did not provide the criteria used to arrive at the proposed allocation of Sh405.1 billion.

Over the years, the National Assembly has sided with the Treasury on matters of budgetary allocation to the counties. This may be the case this year, implying a looming major standoff.

In the current financial year, the two Houses clashed after the Senate proposed a higher allocation than that suggested by the Treasury and the National Assembly.

While the Treasury and National Assembly gave the devolved units Sh380 billion, the Senate insisted on Sh400.1 billion.

Finally, the two parties settled on Sh387 billion after weeks of intense mediation.

According to the Senate committee, after deducting mandatory allocations as provided for in the constitutions (non-discretionary), only Sh353.4 billion remains for distribution between the two levels of government.

This falls short of the proposed Sh405.1 billion county equitable share, highlighting a misalignment between the sharable revenue provided under Article 203(2) and the government’s mandatory expenditure commitments under Article 203(1).

In addition, the committee took issue with the Intergovernmental Relations Technical Committee for failing to ensure that resources are released to counties to perform devolved functions.

Last December, IGRTC identified, delineated and transferred several functions to county governments. However, the BPS 2025 does not outline a framework for allocating and transferring the necessary resources to support these functions.

“The absence of clear policy direction contradicts the principle that resources should follow functions, potentially hindering effective service delivery at county level,” it said.