President William Ruto has paved way for the disbursement of a record Ksh415 billion to all 47 county governments in the new financial year after signing into law the County Allocation of Revenue Bill 2025.
Ruto assented to the bill on Wednesday, August 13, saying the new development represented an increase of up to Ksh28 billion from last year's allocation which stood at Ksh387.4 billion.
"We have increased the equitable share of revenue to Ksh415 billion among our 47 Counties, representing a rise of almost Ksh30 billion from the previous financial year’s Ksh387.4 billion," Ruto said, moments after assenting to the bill.
"The significant increase in the funds underpins our commitment to mobilising more resources to support devolution and boost service delivery to the people at the grassroots,” he said.
Distribution of the funds will be guided by the Fourth Basis Formula for Revenue Sharing, which considers factors including population size, land area, poverty levels, and development needs to ensure fairness and address regional disparities.
With this in mind, populous counties are set to reap the largest share of the allocation per a revenue-sharing formula approved by Parliament. Nairobi county, for example, is set to receive Ksh21.4 billion.
Nakuru County comes in second with an allocation of Ksh14.4 billion with Turkana County (Ksh13.89 billion), Kakamega County (Ksh13.6 billion), and Kiambu County (Ksh13.07 billion) rounding off the top five counties with the largest allocation. Lamu County receives the smallest allocation at Ksh3.85 billion.
The new county funding will see 12 counties receive an increase in allocation, with Lamu leading with a whopping 18.53 per cent increase and Tharaka Nithi following closely with a 14.97 per cent increase in allocation.
Counties will first receive a base allocation of Ksh387.425 billion issued in the 2024/2025 FY, then there will be an affirmative Ksh4.46 billion equally shared among 12 marginalised counties and lastly an additional Ksh23.115 billion distributed based on the Fourth Basis Formula for Revenue Sharing.
The County Allocation of Revenue Bill, 2025 establishes a clear legal and financial framework to ensure transparency and accountability in funds usage. For one, all transfers are to be recorded in county treasuries' financial statements and deposited into County Revenue Funds according to a payment schedule approved by the Senate.
The Commission on Revenue Allocation (CRA) had initially recommended county governments' allocation of Ksh417.4 billion, but this figure was trimmed to Ksh415 billion after negotiations.
Assent of the County Allocation bill came just weeks after President William Ruto signed into law the Division of Revenue Bill, 2025, paving way for the distribution of Ksh2.835 trillion between the national and county governments for the 2025/2026 financial year.
The bill was meant to establish a broader framework for revenue sharing between the county and national governments.
