THE EQUALISATION FUND APPROPRIATION BILL, 2025
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Executive
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KSh 16.296 Billion Transferred to Beneficiary Counties
Allocates KSh 16,296,000,000 directly to designated beneficiary counties and constituencies. Under Article 204(2) of the Constitution, these funds must be applied strictly to provide basic services such as:
- Water infrastructure
- Road networks
- Health facilities
- Electricity connections
Mandatory Special Purpose CBK Accounts
To secure the development funds, the Bill establishes strict financial ring-fencing rules:
- Funds transferred under this Act shall not be paid into the standard County Revenue Fund.
- Every beneficiary county must open and maintain a special purpose account in the Central Bank of Kenya specifically for these allocations.
KSh 504 Million Earmarked for Board Expenses
Sets aside KSh 504,000,000 to fund the expenses and recurrent costs of the Equalisation Fund Advisory Board for the financial year ending 30th June, 2026, in accordance with regulation 10(3) of the Public Finance Management (Equalisation Fund Administration) Regulations.
Funds Protected From Lapsing At Year-End
Guarantees that project approvals do not expire at the close of the financial year. Under Section 6, the approvals remain active until the projects in each constituency are completed, giving the Controller of Budget ongoing authority to authorize withdrawals beyond one financial year.
Bill No.
Bill No. 21 of 2025
Gazette No.
Supplement No. 80 of 2025
Background
The Equalisation Fund is established under Article 204(1) of the Constitution of Kenya. Its primary purpose, as detailed in Article 204(2), is to provide basic services—including water, roads, health facilities, and electricity—to marginalised 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 authority required to allocate, withdraw, and spend these funds for the financial year ending 30th June, 2026.
Key Provisions
- Total Funding Authorization: Authorizes the Equalisation Fund Advisory Board to issue and apply KSh 16,800,000,000 out of the Equalisation Fund for the service of the financial year ending 30th June, 2026.
- Administrative Expenses: Allocates KSh 504,000,000 of the total fund to cover the secretariat and administrative expenses of the Equalisation Fund Advisory Board, pursuant to regulation 10(3) of the Public Finance Management (Equalisation Fund Administration) Regulations.
- County Allocations: Directs KSh 16,296,000,000 to beneficiary counties and constituencies. Highly funded areas include:
- Turkana County: KSh 1,860,614,374 (including KSh 516,114,959 for Turkana North)
- West Pokot County: KSh 1,661,556,686 (including KSh 570,382,383 for Kacheliba)
- Narok County: KSh 1,254,952,707
- Mandera County: KSh 1,225,254,814
- Wajir County: KSh 1,187,457,792
New Obligations
- Exclusion from County Revenue Funds: The Bill explicitly mandates that sums transferred to counties under Section 4 must not be deposited into the regular County Revenue Fund.
- Central Bank Accounts: Each beneficiary county must open a special purpose account in the Central Bank of Kenya where these specific funds will be paid.
- Withdrawal Process: Any withdrawal from the Fund requires authorization by the Controller of Budget, acting on written instructions from the Secretary of the Board and requested through the National Treasury.
Transitional Provisions
- Retroactive Commencement: Section 1 provides that the Act shall be deemed to have come into force on 1st July, 2025, to align seamlessly with the start of the 2025/2026 financial year.
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