County governments are facing a major financial blow as Parliament kicks off mediation talks on the Division of Revenue Bill, 2025. On the opening day of negotiations between the Senate and the National Assembly, senators made a significant concession scaling down their proposed allocation to counties from Sh465 billion to Sh435 billion. This Sh30 billion reduction deals a heavy blow to devolved units seeking a greater share of national revenue.
In contrast, the National Assembly increased its allocation marginally from Sh405 billion to Sh408 billion. Both figures remain below the Senate’s original proposal, despite counties receiving Sh387.2 billion in the current financial year. The mediation committee, co-chaired by Senator Ali Roba (Mandera) and MP Samuel Atandi (Alego Usonga), comprises 18 members from both Houses and is tasked with fast-tracking consensus ahead of the July 1 fiscal deadline.
National Assembly members defended their position, citing Kenya Revenue Authority’s underperformance in revenue collection. Atandi emphasized the need for realistic budgeting, warning against making “promises we cannot keep.” Kilifi North MP Owen Baya added that overestimating allocations would only worsen the pending bills crisis facing counties, while Ndia MP George Kariuki urged fiscal restraint.
However, senators countered that counties are grappling with increasing national policy burdens, including the housing levy, enhanced NSSF contributions, and obligations under the Social Health Authority. Senator Roba argued that these costs, imposed by the national government, are not matched with adequate funding, placing counties under unsustainable pressure.
Elgeyo Marakwet Senator William Kisang noted counties now shoulder over Sh35 billion in mandatory national expenditures, reinforcing the Senate’s call for a higher allocation to protect service delivery and development.
Although the temporary consensus on Sh435 billion shows signs of compromise, it also highlights the fragility of devolution financing. With mediation talks set to continue next Monday, pressure is mounting to strike a balance between fiscal realism and constitutional obligations. A final figure lower than Sh465 billion could stall key county services and deepen financial distress, setting the stage for a pivotal showdown in the coming week.
