Nairobi, Kenya — Thursday, 26 February 2026:
In a growing political and fiscal standoff, the Senate Finance and Budget Committee has firmly rebuffed a demand by county governors for a Sh535 billion allocation in the upcoming financial year — telling them essentially “you’re on your own” in their push for increased funds.
In a growing political and fiscal standoff, the Senate Finance and Budget Committee has firmly rebuffed a demand by county governors for a Sh535 billion allocation in the upcoming financial year — telling them essentially “you’re on your own” in their push for increased funds.
The dispute highlights rising tension between the national legislature and devolved county governments over revenue sharing, county autonomy, and how scarce public funds should be distributed.
Budget Allocation Debate
The Senate Finance Committee tabled its proposed county allocation at approximately Sh454.74 billion, which is about Sh80.2 billion less than the Sh535 billion figure sought by the Council of Governors (CoG). Senators argued that this level is more realistic given the country’s fiscal constraints, projected revenue, and competing national priorities.
This position marks a sharp departure from county leaders’ expectations. Governors have repeatedly called for higher funding, citing rising operational costs, wage bills, pending bills, and development needs across the 47 county governments.
🤝 Governors vs. Senate: Key Points of Contention
- Independent Borrowing Rejected: Senators also rejected a push by governors to borrow independently — a move county chiefs say would give them urgent access to funds for development but feared by senators to expose counties to unsustainable debt without national oversight.
- Oversight and Capacity Issues: Committee members emphasized that many counties lack financial discipline and capacity for responsible debt management, pointing to persistent pending bills and financial mismanagement concerns in past budgets.
- Senate Pushes Fiscal Prudence: Senators maintain that while devolved units do require adequate funding, fiscal prudence and oversight are critical — especially given Kenya’s broader economic pressures, including debt servicing and the need to balance national and county commitments.
Broader Fiscal Context
The Commission on Revenue Allocation (CRA) recently proposed an even higher allocation figure of about Sh458.94 billion for counties — closer to, but still below, governors’ demands — reflecting projected revenue increases in the 2026/27 budget.
Meanwhile, the Parliamentary Budget Office has raised concerns over how counties have spent more than Sh4.6 trillion over recent years without delivering commensurate improvements in public services, urging refocused spending on priority services that directly benefit residents.
What Happens Next?
The dispute is set to continue as: - National Treasury and Parliament prepare the 2026/27 Budget Policy Statement and final estimates.
- Governors campaign for greater flexibility and higher shares of the national revenue pie.
- Senators insist on fiscal discipline and oversight frameworks before further increases are approved.
The debate underscores ongoing friction in Kenya’s devolution architecture — with both sides asserting that they are representing the interests of Kenyans while navigating economic and political pressure
