Focus on governors as details emerge on how counties are sharing Sh415bn

Governors face more scrutiny as details emerge on how county governments will share the Sh415 billion allocated for the 2025-26 financial year.

With the allocation rising from Sh387.42 million from the last financial year, all the 47 counties will have more cash at their disposal.

The County Allocation of Revenue Bill, 2025, now before the Senate, outlines how the equitable share of nationally raised revenue will be distributed among Kenya’s 47 counties.

As per the Bill, Nairobi, Kiambu, Nakuru, Turkana and Kakamega will receive the largest portions, with Lamu, Elgeyo Marakwet, Isiolo, Tharaka Nithi and Taita Taveta getting the least share of the allocation.

“The object of this Bill is to provide for the allocation of an equitable share of revenue raised nationally among the county governments, in accordance with the resolution approved by Parliament under Article 217 of the Constitution,” the Bill states.

The allocations come at a time when governors are under increased scrutiny over poor fiscal discipline, ballooning wage bills and low development expenditure.

Most of the devolved units are failing to meet their own source revenue targets, forcing them to rely entirely on the equitable share for survival.

In the Bill, Governor Johnson Sakaja’s Nairobi is receiving Sh21.41 billion from Sh20.17 billion allocated in the previous year.

Governor Susan Kihika’s Nakuru’s allocation has increased from Sh13.77 billion to Sh14.45 billion, with Governor Jeremiah Lomorukai’s Turkana’s allocation growing from Sh13.21 billion to Sh13.89 billion.

Governor Fernandes Barasa’s Kakamega and Kimani Wamatangi’s Kiambu are getting Sh13.67 billion and Sh13.07 billion from Sh12.98 billion and Sh12.29 billion, respectively.

Also, in the category of big gainers are Mandera, whose allocation has increased from Sh11.69 billion to Sh12.26 billion and Kilifi, which will get Sh12.81 billion from Sh12.16 billion.

Others are Kitui (Sh11.50 billion), Bungoma (Sh11.83 billion), Wajir (Sh10.50 billion), Meru (Sh10.55 billion), Machakos (Sh10.17 billion).

“Each county government’s allocation shall be transferred to the respective County Revenue Fund in accordance with a payment schedule approved by the Senate,” the Bill states.

Kisii will get (Sh9.81 billion), Kwale (Sh9.07 billion), Narok (Sh9.77 billion), Uasin Gishu (Sh8.97 billion), Mombasa (Sh8.38 billion), Migori (Sh8.88 billion), Marsabit (Sh8.10 billion), Kisumu (Sh8.90 billion) and Makueni (Sh8.97 billion).

Conversely, Lamu is receiving Sh3.85 billion from Sh3.25 billion, Elgeyo Marakwet is getting Sh5.51 billion from Sh4.82 billion, and Isiolo is receiving Sh5.63 billion from Sh4.92 billion.

Tharaka Nithi and Taita Taveta are receiving Sh5.05 billion and Sh5.75 billion from Sh4.39 billion and Sh5.06 billion, respectively.

Kirinyaga is getting Sh6.15 billion from Sh5.44 billion, Laikipia is getting Sh6.10 billion from Sh5.38 billion, Nyamira is getting Sh6.07 billion from Sh5.35 billion while Nyandarua is getting Sh6.66 billion from Sh5.93 billion.

Samburu will receive Sh6.33 billion from Sh5.62 billion, Vihiga Sh6 billion from Sh5.29 billion and Embu is getting Sh6.07 billion from Sh5.36 billion.

In addition to their equitable share, the 12 counties receiving the least funds will each get an additional Sh371.66 million under an affirmative allocation established in the new revenue-sharing formula.

This totals Sh4.46 billion, deducted from the overall Sh415 billion, to promote development in historically marginalised areas.

The remaining funds—after deducting the Sh4.46 billion affirmative allocation—are distributed using a new formula that will guide revenue sharing from 2025-26 to 2029-30.

“For the avoidance of doubt, the allocation of the equitable share of revenue to county governments shall be in accordance with the fourth determination of the basis of division of revenue among counties, approved by Parliament pursuant to Article 217(7) of the Constitution,” the Bill emphasises.

The baseline allocation has been set at Sh387.42 billion, which was the equitable share for counties in FY 2024-25. This means no county will receive less than it got in the previous financial year.

“The first Sh387.42 billion (being county equitable share for FY 2024-25) shall be shared among counties based on the baseline allocation factor derived from each county’s allocation for FY 2024-25,” the formula states.

Any amount above this baseline—excluding the affirmative fund—is shared using the new formula.

The formula entails: basic (equal) share, which has been weighted at 35 per cent, the poverty index at 14 per cent and geographical size at eight per cent.

Population weights 45 per cent.

The new framework will dictate revenue sharing among the counties for five years, from 2025-26 to 2029-30.

The latest CoB report, by Margaret Nyakang’o, reveals that counties spent Sh154.94 billion on personnel emoluments in the first nine months of the last financial year—nearly triple the Sh56.87 billion spent on development.

Nairobi splashed Sh12.83 billion to pay its more than 13,000 staff compared with Sh2.42 billion spent on development over the period.

Nakuru spent Sh4.8 billion on personnel emoluments against Sh940.07 million on development, with Kiambu spending Sh6.38 billion on staff against Sh1.81 billion incurred in development.

Turkana spent Sh4.39 billion against Sh2.60 billion incurred on development, with Kakamega spending Sh4.98 billion on staff compared with Sh1.20 billion on development

Kisumu spent Sh4.18 billion on personnel emoluments against a paltry Sh491.86 million on development over the period.

Lamu spent Sh1.43 billion to pay staff, while Taita Taveta spent Sh2.2 billion during the period and Embu spent Sh2.15 billion.

Other big spenders on staff emoluments are Bungoma (Sh4.70 billion), Kitui (Sh4.4 billion), Machakos (Sh5.2 billion), Narok (Sh4.5 billion), Wajir (Sh3.2 billion) and Mombasa (Sh3.9 billion).

Others are Meru (Sh3.8 billion), Nyeri (Sh3.3 billion) and Murang’a (Sh3.1 billion).

The CoB report reveals that nearly all the counties are relying on the exchequer for funding as they perennially fail to meet their own source revenue targets.

In the first nine months of the last fiscal year, county governments generated Sh45.91 billion from their OSR, which was 53 per cent of the annual target of Sh87.11 billion.

Ideally, the counties should have hit 75 per cent of their targets as at the end of the third quarter of the fiscal year.

At least 15 counties recorded less than 50 per cent of their annual revenue target.

They are Nyamira (47 per cent), Kilifi (46 per cent), Busia (46 per cent), Siaya (44 per cent), Embu (44 per cent), Nandi (44 per cent), Kajiado (43 per cent), Kiambu (42 per cent), Kwale  (42 per cent), Kisii (41 per cent) and Bomet (40 per cent).

Taita Taveta, Kisumu, Bungoma and Machakos counties have recorded less than 40 per cent of their annual targets.

“The low OSR performance creates an environment for accumulating pending bills. The Controller of Budget advises county governments with low OSR performance in the first nine months of FY 2024-25 to consider revising their revenue estimates downward,” Nyakang’o said.