NAIROBI, KENYA – A major clash over public finances is escalating between Kenya's two levels of government, with county governors threatening a complete shutdown of operations due to the National Treasury's failure to release KSh63.6 billion in equitable share revenue. The funds, intended for the months of October and November 2024, are critical for paying salaries, funding development projects, and delivering essential services like healthcare to millions of Kenyans.

In a press briefing on Monday, November 18, 2025, the Council of Governors (CoG), led by its chairperson, Wajir Governor Ahmed Abdullahi, declared the delays a violation of the law and a direct threat to devolution. "We demand that the National Treasury immediately releases the funds owed to counties, failure to which, County Governments will have no choice but shut down operations completely," Abdullahi stated after a meeting at the CoG headquarters in Nairobi.

The funding impasse stems from protracted debates in Parliament over the Division of Revenue (Amendment) Bill 2024. While the Senate has approved a county allocation of KSh400.1 billion, the National Assembly has insisted on a lower figure, creating a legislative stalemate that has prevented the County Allocation of Revenue Act from being passed and assented to, five months into the 2024/2025 financial year.

A Recurring Crisis Crippling Services

This is not an isolated incident but part of a persistent pattern of delays that has plagued devolution since its inception. County leaders argue that these perennial delays cripple their ability to function, forcing them to halt key projects and accumulate pending bills, which in turn harms local economies. Several governors, including Kisii Governor Simba Arati and Kakamega Governor Fernandes Barasa, have accused some national government officials of deliberately frustrating devolution by withholding the funds.

The consequences for ordinary Kenyans are severe. County employees, including healthcare workers, often go for months without salaries. Development projects stall, and counties are sometimes forced to seek expensive overdrafts from commercial banks to meet basic operational costs, a measure that burdens taxpayers with high interest payments. The CoG noted that while counties are starved of funds, the National Government continues to receive its revenue share, pointing to the recent passage of the Supplementary Appropriations Act 2024 by the National Assembly.

The Legal and Economic Underpinnings

Under Kenya's 2010 Constitution, nationally raised revenue must be shared equitably between the national and county governments. The Public Finance Management Act (PFMA) of 2012 further mandates that the Treasury should disburse funds to counties by the 15th day of each month to ensure predictable cash flow. However, the National Treasury has often cited shortfalls in revenue collection and a high public debt servicing cost as reasons for the delays.

The Commission on Revenue Allocation (CRA), the constitutional body responsible for recommending the revenue-sharing formula, has presented its recommendations for the 2025/2026 fiscal year, but the ongoing legislative impasse over the current year's allocation remains the primary bottleneck. Analysts note that this cycle of delayed disbursements and legislative disputes undermines the very predictability and stability of funding that is essential for counties to perform their functions effectively.

A Looming Oversight Battle

Compounding the financial tensions is a separate but related conflict over county oversight. A new proposal, the County Oversight and Accountability Bill, 2024, sponsored by Narok Senator Ledama Olekina, seeks to establish oversight offices for senators within each county to monitor the use of public funds. While senators argue this will enhance transparency and accountability, governors view it as an attempt to micromanage their affairs and undermine their executive authority. This looming power struggle adds another layer of complexity to the already fraught relationship between the two levels of government.

As the deadline for action approaches, citizens across the 47 counties wait anxiously. The resolution of this fiscal clash will not only determine the immediate fate of public services but will also serve as a critical test of Kenya's commitment to the principles of devolution. The CoG has called on the Senate to expedite the passage of the County Allocation of Revenue Act to resolve the immediate crisis and avert a nationwide service delivery paralysis.