CRA Proposes Increased Funding for County Governments

By Jaqueline

The Commission on Revenue Allocation (CRA) has recommended increasing funding to Kenya’s 47 county governments to Sh440.84 billion in the 2027/28 financial year.

The proposed allocation would be an increase from the Sh428 billion allocated to counties in the current financial year. According to the CRA, the new figure represents a three per cent increase, equivalent to an additional Sh12.84 billion.

CRA Chairperson Mary Chebukati presented the proposal during a meeting with the Senate Finance and Budget Committee in Nairobi. She said the recommendation was based on the country’s revenue projections and the need to ensure counties have adequate resources to deliver essential services.

The CRA has also proposed Sh10.25 billion for marginalised areas under the Equalisation Fund, aimed at addressing historical development gaps and improving services in areas that have remained disadvantaged.

However, the proposed county allocation is lower than the Sh458 billion that the CRA had initially recommended for the 2026/27 financial year. The National Treasury had proposed Sh420 billion, while the Senate had suggested Sh454 billion, resulting in a disagreement over the final amount.

The commission has warned that government revenue could remain vulnerable, particularly during election periods when economic activity may slow. It said past trends show that revenue collection tends to perform below expectations during election years.

CRA data indicates that ordinary revenue reached about Sh2.58 trillion in 2025/26, an increase from the previous year. However, the commission said the expected revenue growth remains uncertain.The proposed reduction from earlier county funding targets is likely to face resistance in the Senate, where lawmakers have traditionally pushed for higher allocations to devolved governments.

Senators argue that counties require adequate funding to meet rising wage bills, provide healthcare, improve infrastructure and deliver other essential services.

The debate is therefore expected to continue as Parliament considers how much revenue should be allocated to the national and county governments for the 2027/28 financial year.