A breakthrough appears to be on the horizon in the ongoing standoff over county funding after lawmakers from the National Assembly and Senate reported significant progress in negotiations on the Division of Revenue Bill, 2026. With both sides showing flexibility on key issues, including safeguards against budget disruptions and the amount earmarked for counties, a final agreement may be within reach.

Highlights

• Mediation Committee reports major progress in revenue-sharing negotiations.
• National Assembly agrees in principle to restore a key clause protecting counties.
• Funding gap between the two Houses has narrowed significantly.
• Senate continues to push for stronger financial support for devolved units.
• Further consultations expected before a final agreement is reached.

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Progress Recorded in Revenue-Sharing Talks

Members of the Mediation Committee tasked with resolving differences over the Division of Revenue Bill, 2026, have expressed optimism after making notable strides toward a compromise.

The joint session, led by Budget and Appropriations Committee Chairperson Samuel Atandi and Senate Finance and Budget Committee Chairperson Ali Roba, acknowledged the growing willingness from both sides to find common ground on county funding.

Lawmakers described the discussions as constructive, with several sticking points now closer to resolution.

Counties Set to Benefit from Budget Protection Clause

One of the key areas of agreement revolves around Clause 5 of the Bill, which seeks to protect county governments from sudden expenditure cuts whenever national revenue collections fall below projections.

Senator Ali Roba argued that the provision is essential because counties do not enjoy the same borrowing flexibility available to the national government. According to him, the clause would provide greater certainty in planning and implementation of county programmes.

The National Assembly also signaled support for the proposal following consultations with the National Treasury, with Atandi confirming that the House had agreed in principle to restore the provision.

Several legislators welcomed the move, saying it would strengthen financial stability at the county level and reduce uncertainty in service delivery.

Funding Gap Continues to Narrow

Debate over the total amount to be allocated to counties remains the main issue under discussion.

Initially, the National Assembly proposed KSh 420 billion while the Senate pushed for KSh 450 billion. However, both sides have since adjusted their positions in a bid to reach a middle ground.

The National Assembly has raised its proposal to KSh 425 billion, arguing that the figure reflects the realities of the current revenue environment and competing national priorities.

On the other hand, the Senate has reduced its demand to KSh 440 billion, maintaining that counties require additional resources to support development projects and meet existing obligations.

Calls for Stronger Support to Devolution

Several senators continued to advocate for increased allocations to county governments.

Senator Eddy Oketch argued that available assessments indicate counties require funding closer to KSh 445 billion to effectively address stalled projects and pending financial commitments, including Equalisation Fund arrears.

Meanwhile, some MPs urged caution, citing economic pressures and revenue collection challenges facing the country.

MP Mwengi Mutuse suggested that any future improvement in revenue performance could allow for additional allocations through supplementary adjustments rather than committing to a higher figure immediately.

More Consultations Ahead

As the meeting concluded, lawmakers agreed to temporarily adjourn and continue consultations before reconvening.

Senator Roba praised the willingness shown by both Houses, noting that substantial progress had already been made from their original positions.

The committee remains confident that a consensus will be reached soon, paving the way for the timely passage of the Division of Revenue Bill, 2026, and ensuring uninterrupted funding for county governments and national programmes.

As negotiators return to the table, the final decision will not only determine how much money counties receive but also signal how strongly Kenya intends to support devolution in the years ahead.