Lawmakers Greenlight Additional Sh70.6 Billion in County Funding

The parliament has ended a stalemate of over 15 years on the reenactment of the budget, which means that counties will now get extra allocations of Sh70.6 billion in the financial year 2025/ 26. The deal between the National Assembly and the Senate concludes months of wrangling between the two chambers on the level of additional funding that the county governments could receive and is likely to alleviate the cash crisis that had paralyzed several local projects.

The breakthrough followed when the senators consented to embrace the amendments on the County Governments Additional Allocation Bill, 2025 by the National Assembly that offers conditional and unconditional grants to counties in addition to their fair share of national revenue. The approval opens the doors to the much-needed cash to the 47 devolved units enabling the county operations and development projects to be implemented, which have been facing a long financial paralysis.

However, those counties who are not already enacting the County Aggregation and Industrial Parks (CAIPs), and five counties where the headquarters have not yet been built, do not see themselves receiving some of the allocation in the new deal.

The principal point of difference between the two Houses was the amount of the additional allocation. The Senate had been demanding Sh93.5 billion, whereas the National Assembly demanded to limit it to Sh70.6 billion. The most controversial issue was the Sh23.64 billion Roads Maintenance Levy Fund (RMLF) which is now under court battle on whether it should be under national jurisdiction or county jurisdiction.

The Finance and Budget Committee of the Senate had advised the senators to pass the version of the Bill by the National Assembly, which would offer compromise on the bill, so as to deliver services.

Nominated Senator Tabitha Mutinda, who is the vice chair of the committee, said: The amendments of the National Assembly have been adopted, out of goodwill, in the interest of the counties, and the service delivery to our people. I would like to request my fellow senators to approve this because we can end this issue during this financial year.

Migori Senator Eddy Oketch, a member of the committee also backed the Bill, indicating that additional stalling would increase the financial predicaments of the counties. He played down the dispute saying that the RMLF problem is already in the courts.

This does not imply that we are abandoning the battle of RMLF, he said. As soon as the court makes its decision, we will proceed with it.

Senator Mutinda shared the same sentiments and said that the two Houses had agreed that the court process would be allowed to run its course in accordance with the parliamentary process.

The remaining portion of their funds will now be given to those counties that have already achieved much improvement, more than 50 percent, on their CAIPs even under the approved amendments. This makes it possible to have the continuity of the projects as opposed to funding the new projects.

Also the Parliament reduced slightly allocations to five counties which have not yet completed construction of their headquarters: Isiolo, Lamu, Nyandarua, Tana River, and Tharaka Nithi. The sh1 million allocated to each county was cut and the total allocated to these projects came down to Sh449 million as opposed to 454 million. Isiolo will now get Sh59 million with Lamu, Nyandarua, and Tana River getting Sh120 million each. Tharaka Nithi has allocated Sh30 million.

Mutinda said that the deductions were to put the situation to rest effectively, and the plan was to replenish the amounts in the coming financial year.

Contrastingly, the National Assembly also increased the amount of funding allocated to two national development projects, the Kenya Devolution Support Programme, which increased its allocation by one and a half by increasing its funding to Sh3.43 billion, and the Kenya Informal Settlement Improvement Project which increased its funding by ten times to Sh2.5 billion.

Although senators passed the compromise, many of them showed unease at what they termed as encroachment of the National Assembly into the affairs of the counties.

In her criticism of MPs, Machakos Senator Agnes Kavindu told the House that it was unethical of the lower House to cut allocation approved by the Senate since the lower House had no constitutional obligation of the affairs of the county.

The request to have clear mechanisms to facilitate the release of more allocations in good time was raised by the nominated Senator Catherine Mumma who said that constant delays derailed service delivery.

Nairobi Senator Edwin Sifuna even went to the extent of accusing the National Assembly of employing intimidation tactics in an attempt to pass its stand and told the compromise that it would deprive the counties of a good deal.

Nevertheless, the frustrations notwithstanding, the Bill signing is an important milestone towards restoring economic sanity to the devolved units. The county governments are now able to resume their operations and finish off projects that have been stalled as they await more clarity on the controversial Roads Maintenance Levy Fund case.