The Equalisation Fund Appropriation Bill, 2025
Status Timeline
Proposed
Done ยท 15 Sep 2026
Public Review
Done
Debate
Active now
Executive
Pending
Final
Pending
KSh 16.8 Billion Total Appropriation
Authorizes KSh 16,800,000,000 to be issued from the Equalisation Fund for the FY 2025/26.
- Advisory Board Recurrent Expenses: KSh 504,000,000 allocated for Board operations under regulation 10(3) of the PFM (Equalisation Fund Administration) Regulations.
- County Development Expenditure: KSh 16,296,000,000 allocated for transfer to beneficiary counties for basic services in designated constituencies.
Mandatory Special Purpose Accounts
Establishes strict financial separation rules for county transfers under Section 5:
- Allocated funds cannot be paid into the general County Revenue Fund.
- Beneficiary counties must open a special purpose account at the Central Bank of Kenya specifically for receiving their Equalisation Fund allocations.
Extended Approvals for Multi-Year Projects
Ensures that project funding does not lapse at the end of the financial year under Section 6:
- Approvals for constituency projects remain in force until the projects are fully completed.
- Authorizes the Controller of Budget to sanction withdrawals for projects implemented beyond a single financial year.
Bill No.
No. 21 of 2025
Gazette No.
Supplement No. 80
Sponsor
SAMUEL ATANDI
Background
The Equalisation Fund is established under Article 204(1) of the Constitution of Kenya. Its mandate is to provide basic services, including water, roads, health facilities, and electricity, to marginalized areas to bring the quality of those services to the level generally enjoyed by the rest of the nation. The Equalisation Fund Appropriation Bill, 2025 provides the statutory framework to authorize the expenditure of KSh 16,800,000,000 from this Fund for the financial year ending 30th June, 2026.
New Obligations
- Central Bank Accounts: Beneficiary counties are required to open special purpose accounts with the Central Bank of Kenya to receive transfers (Section 5(2)).
- Ring-fencing of Funds: Monies transferred to counties from the Equalisation Fund must not be mixed with county-generated revenue and are explicitly barred from being deposited into the County Revenue Fund (Section 5(1)).
- Withdrawal Procedures: Under Section 7, the Controller of Budget can only authorize withdrawals from the Fund upon receiving written instructions from the Advisory Board Secretary, routed through the National Treasury to the Central Bank of Kenya.
- Multi-Year Project Tracking: Project approvals granted under Section 4 must be maintained in force until the target projects are fully completed, regardless of whether implementation extends beyond the 2025/2026 financial year (Section 6).
Gazettement
The Equalisation Fund Appropriation Bill, 2026 was published in the Kenya Gazette No. 150.
First Reading
The bill was read a First Time in the National Assembly.
Second Reading
Debate on the Second Reading of the bill commenced in the National Assembly.