President William Ruto in Kakamega County on June 15, 2025.
President William Ruto and the National Treasury had to intervene in the mediation process between members of the National Assembly and the Senate regarding the equitable share of revenue to counties for the 2025/2026 financial year, the Nation has learnt.
The 18-member mediation team, with equal representation from both Houses, was making little progress, and time was running out as the end of the financial year approached, risking a financial crisis in the counties.
Sources told Nation.Africa that President Ruto urged the team not to stifle devolution, but rather to agree on a sum that the economy could support. He reportedly made it clear that he did not want to be at odds with the governors, and encouraged both sides to be realistic with their demands.
Officials from the National Treasury played a key role in brokering the deal by providing an economic and financial outlook for the country.
They informed the team that, since the 2024/2025 Finance Bill had been rejected, the government was trying to recover anticipated revenue shortfalls. They added that the 2025/2026 Finance Bill also lacked many new revenue-raising measures, making it difficult to allocate additional funds to counties.
Some of the members of the mediation committee on county funds allocation, Mandera Senator Ali Roba, Kajiado Woman Representative Leah Sopiato Sankaire, Aldai MP Maryanne Keitany and Migori Senator Eddy Gicheru Oketch during a session at the Bunge Towers in Nairobi on June 17, 2025.
When contacted for comment, Treasury Cabinet Secretary John Mbadi confirmed this, saying, "We just agreed behind the scenes on the Sh415 billion."
While presenting the mediated version of the Bill on Thursday, the Chairperson of the Budget and Appropriations Committee, Samuel Atandi, acknowledged the critical roles played by the President and the National Treasury in reaching the agreement.
“I want to thank the President because at some stage, we had to engage the Presidency to help us iron out some of the challenges we faced. I also want to thank the National Treasury because we had to consult them to arrive at a figure agreeable to both parties,” said Mr Atandi.
He said that the National Assembly softened its stance and increased the amount to Sh415 billion. During mediation, various issues came up, including non-discretionary expenditure that counties must incur due to national government programmes.
“These non-discretionary expenditures total to Sh34 billion, and counties have been grappling with how to get resources to meet these costs. That is why we decided to enhance the shareable allocation by Sh27 billion,” he said.
Members of mediation committee on Division of revenue bill, 2025 -- Kajiado Woman Representative Leah Sopiato Sankaire (left), Aldai MP Maryanne Keitany and Senator Eddy Gicheru Oketch in Nairobi on June 17, 2025.
This financial year, counties received Sh387 billion. The House added Sh27 billion to help cover non-discretionary expenses. Such expenditures include the housing levy, increased contributions to the National Social Security Fund (NSSF), matching allocations to County Aggregation and Industrial Parks (CAIPs), and Universal Health Coverage (UHC). The housing levy deductions alone consume approximately Sh41 billion of county allocations.
Counties are also jointly funding the establishment of Sh500 million County Aggregation and Industrial Parks.
In March, the Division of Revenue Bill 2025 was published in line with Article 216 of the Constitution and Section 42 of the Public Finance Management Act.
This law stipulates that, at least two months before the end of the financial year, the bill determining how nationally raised revenue will be divided between the two levels of government must be enacted.
On April 9, 2025, the National Assembly passed the Bill, allocating Sh405.1 billion as shareable revenue, and transmitted it to the Senate for concurrence as required by Article 110(4) of the Constitution.
On May 28, 2025, the Senate passed the Bill with amendments, raising the proposed shareable revenue to Sh465 billion.
On June 3, 2025, the National Assembly rejected the Senate's amendments, prompting the Speakers of both Houses to nominate nine members each to the mediation team.
The National Assembly's team comprised Mr Atandi, Aldai MP Maryanne Kitany, Owen Baya (Kilifi North), Robert Pukose (Endebess), George Kariuki (Ndia), Christopher Aseka (Khwisero), Lea Sankaire (Kajiado), Naisula Lesuuda (Samburu East), and Zamzam Mohamed (Mombasa).
The Senate team comprised Ali Roba (Mandera), Mohamed Faki (Mombasa), Boni Khalwale (Kakamega), William Kisang’ (Elgeyo Marakwet), Danson Mungatana (Tana River), Eddy Oketch (Migori), Richard Onyonka (Kisii), Daniel Maanzo (Makueni), and Tabitha Mutinda(nominated).
The first meeting yielded no progress, with both sides holding firm on their proposed figures. At the second meeting, the Senate reduced its proposal to Sh425 billion while the National Assembly team offered Sh410 billion.
Following interventions by the President and the Treasury, the team finally agreed on Sh415 billion as the shareable revenue to counties.
