CRA proposes more funds for county governments

Commission on Revenue Allocation Chairperson CPA Mary Wanyonyi Chebukati. [Elvis Ogina, Standard]

The Commission on Revenue Allocation (CRA) has recommended that the national government be allocated Sh2.79 trillion, while the 47 county governments should receive Sh440.84 billion as equitable revenue share in the 2027/28 financial year.

The proposal by the CRA Chairperson Mary Chebukati was made during a consultative meeting between the Commission and the Senate Finance and Budget Committee on the revenue sharing recommendations for the 2027/2028 financial year held in Nairobi.

Chebukati said that according to the Commission’s data, the proposed Sh440.84 billion for the 47 counties represents a three per cent increase or an absolute growth of Sh12.84 billion compared to the previous baselines where counties were allocated Sh428 billion in the current financial year.

“The Commission for Revenue Allocation notes that this allocation translates to 21.5 per cent of the most recent audited and approved accounts of revenue for the 2022/23 financial year, which stands at Sh2.05 trillion,” said Chebukati.

The CRA Chairperson told Senators that the marginalised regions are set to receive Sh10.25 billion under the Equalisation Fund umbrella to bridge historical development gaps in efforts to ensure that the marginalised areas are able to catch up with more developed areas.

While the CRA projects that total shareable revenue will expand by 8.12 per cent, rising from Sh2.98 trillion in the 2026/27 financial year to Sh3.24t rillion in 2027/28 — yielding a windfall of Sh263.5billion — the allocation to counties has actually shrunk compared to previous targets.

The new recommendation of Sh440.84 billion falls significantly short of the Sh458 billion that the CRA had initially recommended for the counties in the 2026/27 cycle while the National Treasury had recommended Sh420 billion and the Senate Sh454 billion leading to a stalemate.

“Past trends in ordinary revenue performance have shown significant revenue under-performance during election years, the projected ordinary revenue of Ksh3.24 trillion for the 2027/2028 financial year remains highly vulnerable,” said Chebukati.

In the 2025/26 financial year, actual ordinary revenue reached Sh2.58 trillion, marking a healthy growth of Sh168.2 billion from the Sh2.42trillion collected in 2024/25 with the rationale behind the CRA’s conservative approach stems from deep-seated anxieties surrounding the 2027 electoral cycle.

By cushioning the National Treasury and lowering the baseline for counties, the Commission appears to be planning for fiscal shocks and potential deficits resulting from an election-induced economic contraction.

History shows that Kenyan election is an expensive affair that routinely stall business operations, depress private sector credit, and cause investors to adopt a wait-and-see attitude.

The economic performance in the first quarter of that financial year—coinciding with the peak of the political campaigns and the August 10 vote—is expected to slow down significantly.

The decision to scale back county allocations from the previously targeted Sh458 billion Sh440.84 billion is expected to face stiff resistance in the Senate.

Senators, who serve as the constitutional guardians of devolution, have historically fought for higher allocations to ensure counties can meet rising wage bills, fund medical services and complete local infrastructure projects.

Critics argue that squeezing county budgets while the national government retains Sh2.79trillion undermines the spirit of devolution, especially when total shareable revenue is rising by over Sh263billion.

With the National Treasury needing every shilling to finance election logistics, service debt, and keep the national machinery running, the CRA’s latest recommendations set the stage for a protracted tug-of-war over Kenya’s financial cake.

The Senate Finance Committee Chairperson Mandera Senator Ali Roba blamed the current Governors for the reduced allocation to development in their respective counties and that more focus was being given to recurrent expenditure.

“There is a worrying trend in most counties where there is a decline in development allocation with most resources going to recurrent expenditure, this despite Senators lobbying for the increase of allocation to counties so that they can be able to serve their people better,” said Roba.

Kakamega Senator Boni Khalwale took a swipe at the Inter Budgetary and Economic Council(IBEC) chaired by Deputy President Kithure Kindiki saying that there was a lot of interference from the council which was affecting devolution.

Khalwale said that it was a matter of great concern that most counties had very little to be proud of 15 years since the advent of devolution with nothing to account for the billions of shillings allocated to the various counties with Senators always championing for the increase of the funds.

“It is very disappointing that despite Senators lobbying for the increase of funds allocated to counties there was very little to show for the 15 years of devolution, Governors need to take their work seriously by giving priority to development projects,” said Khalwale.

Fatuma Gedi who is a Commissioner with CRA said that there was a lot of wastage, theft, duplication of projects in most counties which was a worrying trend that needs to be addressed for devolution to be meaningful to the citizens.