Eight counties are set to receive the lion’s share of the Ksh16.8 billion windfall from the Equalisation Fund after Members of Parliament approved the appropriations for the 2025/2026 financial year.
The funding passed under the Equalisation Fund Appropriation Bill is meant to address regional disparities and ensure equitable development across the country, particularly in marginalised areas.
In the development announced on Wednesday, July 30, Turkana County will receive the largest share of Ksh1.86 billion, followed by West Pokot at Ksh1.7 billion and Narok at Ksh1.3 billion.
Mandera and Wajir will receive Ksh1.2 billion each, Samburu will get Ksh1.1 billion, Garissa will get Ksh1 billion, and Baringo will receive Ksh967 million.
Cumulatively, the eight counties will receive over 60 per cent of the total allocation from the Equalisation Fund to finance the provision of water, roads, electricity, and health services in these historically underserved areas. In total, the bill will benefit 34 counties out of the total 47.
The Fund, established from the bill, will aim to bridge the development gap and ensure that these communities enjoy a quality of services comparable to the rest of the country.
The Ksh16.8 billion comprises Ksh6.2 billion rolled over from the 2024/2025 financial year and Ksh10.6 billion earmarked for the current year.
Of the latter, Ksh7.8 billion represents 0.5 per cent of the most recent audited national revenues, while Ksh2.7 billion accounts for arrears approved under the Division of Revenue Bill, 2025.
The bill identified counties with the highest levels of marginalisation based on the Second Policy on Marginalisation.
MPs noted that a total of Ksh504 million has been allocated for administrative and oversight expenses of the Equalisation Fund Board and Secretariat, an amount within the three per cent ceiling provided under the Public Finance Management (Equalisation Fund Administration) Regulations, 2021. The remaining Ksh16.2 billion will go directly to 1,424 marginalised areas.
Further, to safeguard accountability, the Bill directed that funds shall not be deposited into the County Revenue Funds (CRF) but instead transferred to special-purpose accounts opened by each beneficiary county at the Central Bank of Kenya (CBK).
“This measure ensures the funds are used strictly for their intended purpose. The Bill also provides that its enactment constitutes legal authority for the Controller of Budget to approve and authorise disbursements,” MPs noted.
Further, upon the Controller of Budget’s approval and the submission of written instructions from the Secretary of the Equalisation Fund Board through the National Treasury, the Central Bank of Kenya will be authorised to effect payment, streamlining the release process.
Even as it distributed the funds, the Budget and Appropriations Committee highlighted a historical underfunding of the Equalisation Fund. As of June 2024, only Ksh13.4 billion, equivalent to 22.4 per cent of the cumulative Ksh59.96 billion due to the Fund, had been disbursed since its establishment. Arrears currently stand at Ksh46.5 billion.
The funds are set to be in addition to the Ksh474.9 billion allocated to counties by the government for the 2025/2026 financial year. Out of this, Ksh 405.1 billion is their equitable share of revenue raised nationally. The remaining portion comes from conditional grants and other additional allocations.
