Counties across Kenya are slated to receive a total of Sh415 billion after President William Ruto signed into law the Division of Revenue Bill 2025.

The bill was assented to during a ceremony at State House Nairobi, in what now unlocks a significant stage in Kenya’s budgeting process.

This legislation sets the rules on how money collected by the national government is shared between the two levels of government; the national and the county governments.

The regulation ensures that both levels of government receive their fair share and can continue to deliver services like healthcare, roads, agriculture, and water.

Under the new law for 2025, the national government headed by President William Ruto will take home Sh2.3 trillion while counties will share out Sh415 billion.

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Another Sh9.6 billion will be channeled to the Equalisation Fund to support marginalised areas of the country.

This latest figure for counties is an increase from the initial proposal of Sh405.1 billion and also higher than the amount that was allocated for the devlved units in the 2024 allocation.

The original Bill, sponsored by Alego Usonga MP Samuel Atandi, had proposed a total shareable revenue of Sh2.84 trillion causing friction between the two governance levels.

That version suggested Sh2.42 trillion for the national government and Sh405.1 billion for counties, which represented an increase of Sh17.6 billion from the previous year’s figure.

However, the National Assembly Finance Committee later revised the revenue projections downwards to Sh2.76 trillion for the 2025-2026 financial year.

They explained that tax collections were lower than forecast, forcing the government to scale back, even as the 47 counties received more funding in the final version of the Bill.

That is because the Senate updated the base year used to calculate county allocations.

Instead of relying on the 2020/2021 revenue figures, which stood at Sh1.57 trillion, the Senate pushed for the more recent 2021/2022 figures, which were higher at Sh1.92 trillion.

The focus now shifts to the County Allocation of Revenue Bill, which will indicate how the Sh415 billion will be split among the 47 devolved units.

Each of the county governments will receive its portion of the allocated funds based on factors population size, poverty levels, land area, and ability to raise its own revenue etc.

President Ruto’s signing of the Bill into law is expected to ease tensions between the national and county governments over prolonged delays in releasing devolved moneys.

The move also comes when counties have been pushing the national administration to disburse monies faster to enable them pay salaries, suppliers, and fund development.