The Council of Governors (CoG) has rejected the Commission on Revenue Allocation (CRA) proposal to allocate Ksh440.8 billion to counties in the 2027/2028 financial year.
The governors demanded an increase of at least Ksh100 billion, citing rising costs and development functions.
Further, the governors also questioned the independence of the commission, accusing the CRA of aligning its recommendations with those of the National Treasury, ignoring the concerns raised by county governments over the resources needed to deliver the service.
Based on the proposal from the CRA, counties would receive Ksh440.8 billion in equitable share revenue alongside an additional Ksh10 billion from the Equalisation Fund for marginalised areas.
Council of Governors during 2026 full council meeting on October 12, 2026
CoG
However, CoG argued that the proposed allocation did not address the financial pressures facing county governments, which include increased salaries, healthcare costs and funding for functions transferred from the national government.
Speaking during an engagement on the vertical sharing of revenue, governors questioned why CRA met the National Assembly and Senate without first holding consultations with county leaders.
Among the key things CRA was demanded to factor in are the salaries for the universal coverage staff that have now been absorbed by the counties and issued with permanent and pensionable letters, which cost Ksh8.6 billion.
Additionally, according to the governors, an additional Ksh2 billion is needed to take care of Collective Bargaining Agreements for health workers, which include their allowances, to avert strikes in the electioneering year, and Ksh21 billion to be added to the shareable revenue to take care of an increase in salaries by the SRC for county staff.
The governors also demanded the costings for unbundled functions, which, according to a summit resolution, were already pushed to counties but the attendant resources remain at the respective ministries, and this function cost Ksh65.97 billion.
In addition, the CoG has also put in Ksh10 billion for the 47 counties to cater for transitional costs now that the country is going into an electioneering period.
On the other hand, CRA has put in a 5 per cent increment in revenue collection, and thus the counties attach this cost, placing it at an additional Ksh30 billion for adjustments to revenue costs.
CRA recommendations will be able to inform the process of determining how nationally raised revenue is shared between the national and county governments.
Chief Executive Officer of the Council of Governors (CoG), Mary Mwiti, during the signing ceremony.
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Council of Governors