President William Ruto  assented to the highly anticipated Division of Revenue Bill, 2026, officially unlocking Sh428 billion for Kenya’s 47 county governments for the 2026/2027 Financial Year.

The presidential assent draws the curtain on months of intense political posturing and legislative gridlock between the National Assembly and the Senate.

The standoff, which required seven separate high stakes mediation sessions to resolve, had threatened to paralyze operations in devolved units across the country.

The National Assembly had initially dug in its heels with a lower ceiling of Sh420 billion, citing a strained national envelope and mounting debt obligations, while the Senate aggressively lobbied for an allocation exceeding Sh450 billion, maintaining that inflation and expanded local responsibilities required aggressive funding.

The final Sh428 billion figure represents a hard fought middle ground that prevents a looming shutdown in critical grassroots services.

The newly minted law hands the 47 counties a Sh13 billion boost, representing a 15 percent jump from the Sh415 billion allocated in the 2025/2026 fiscal cycle.

Crucially, the equitable share pushes well past the 15 percent constitutional minimum threshold, which is calculated based on the latest audited and approved revenues of Sh2.05 trillion from the 2022/2023 financial year, meaning county allocations now sit at an estimated 21 percent of the baseline national revenue.

A major victory for the counties in this year’s bill is the inclusion of a specific legal cushion in Clause 5.

This protective clause explicitly dictates that if national revenue collections fall short of targets over the financial year, the deficit burden will be borne solely by the National Government, protecting county budgets from sudden, disruptive mid-year cuts.

The expansion of county funds comes at a tight financial time for State House as the National Government continues to face severe expenditure pressures from Consolidated Fund Services, which heavily covers statutory obligations, public pensions, and skyrocketing debt servicing costs.

To offset these pressures and fund the devolved units sustainably, the State is leaning hard into an aggressive fiscal consolidation plan that aims to shrink the national fiscal deficit from 5.9 percent of Gross Domestic Product down to 5.3 percent by the end of the 2026/2027 window, forcing ministries to trim non core spending.

Despite these tight fiscal constraints, the 2026 Act managed to raise the Equalisation Fund to Sh10.25 billion, representing a 0.5 percent increase that is legally earmarked for basic services including water, health facilities, electricity, and local roads in traditionally marginalized and underserved regions.

This legislative milestone directly fulfills the mandates of Article 218 of the Constitution, which requires Parliament to pass a vertical division of revenue between the two levels of government before individual county budgets can be legally approved.

With the total shareable national revenue for the year projected at Sh2.901 trillion, the National Government retains Sh2.464 trillion to manage its intensive domestic and international obligations while the counties take their historic Sh428 billion share.

Now that the vertical split is finalized, the political focus shifts entirely to the Senate, which must urgently process the County Allocation of Revenue Bill to determine the horizontal split and dictate exactly how much money each specific county will receive based on population, poverty levels, and land area.