THE COUNTY GOVERNMENTS ADDITIONAL ALLOCATIONS BILL, 2025
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Executive
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KSh 7.8 Billion Allocated from National Revenue
Sets out conditional allocations from the National Government's share of revenue to counties for specific projects under the First Schedule:
- County Aggregation and Industrial Parks (CAIP) Programme: KSh 2,853,789,474.
- Community Health Promoters (CHPs) Project: KSh 3,234,930,000.
- Healthcare Workers' CBA Salary Arrears (2017-2021): KSh 1,759,101,729.
KSh 17.3 Billion Infusion from Development Partners
Allocates loans and grants from international development partners to support county services under the Third Schedule, including:
- World Bank (IDA): Financing for the Kenya Informal Settlement Improvement Project (KISIP II), Water and Sanitation Development Project (WSDP), and the FLLoCA County Climate Resilience Investment (CCRI) Grant.
- German Development Bank (KfW): Financing for Drought Resilience in Northern Kenya.
- International Fund for Agricultural Development (IFAD): Funding for aquaculture and livestock commercialization.
Strict Monthly and Quarterly Oversight Mandated
Imposes new transparency obligations to track fund disbursement:
- The Cabinet Secretary for Finance must publish a monthly report in the Kenya Gazette detailing all actual transfers to counties by the 15th day of the subsequent month.
- County treasuries must prepare and submit quarterly and annual reports on actual receipts, expenditures, compliance with agreements, and explanations of any bottlenecks.
Unconditional Allocations from Court Fines
Distributes KSh 116,092,724 in unconditional allocations derived from court fines collected during the 2023/24 and 2024/25 financial years. These funds are allocated directly to specific county revenue funds as outlined in the Second Schedule.
Bill No.
Bill No. 2 of 2025
Gazette No.
Supplement No. 12 of 2025
Background
Under Article 202(2) of the Constitution of Kenya, county governments may be given additional allocations from the national government's share of revenue, either conditionally or unconditionally. The County Governments Additional Allocations Bill, 2025, provides the legal framework for allocating and transferring these additional resources, as well as external loans and grants from development partners, to counties for the 2024/2025 Financial Year.
Key Allocations
1. Conditional Allocations from National Government Revenue
A total of KSh 7,847,821,203 is allocated to counties under the First Schedule for three main priority areas:
- County Aggregation and Industrial Parks (CAIP) Programme: KSh 2,853,789,474 distributed across participating counties.
- Community Health Promoters (CHPs) Project: KSh 3,234,930,000 to support local primary healthcare initiatives.
- Basic Salary Arrears: KSh 1,759,101,729 dedicated to paying healthcare workers' outstanding salary arrears under the 2017-2021 Collective Bargaining Agreement (CBA).
2. Unconditional Allocations from Court Fines
A total of KSh 116,092,724 is allocated under the Second Schedule from court fines collected during the 2023/24 and 2024/25 financial years. These allocations are unconditional and distributed to eligible counties, including Kiambu, Machakos, Mombasa, and Murang'a.
3. Conditional Allocations from Development Partners
A total of KSh 17,358,515,570 in loans and grants is allocated under the Third Schedule for local developmental programs, funded by external partners including:
- DANIDA: Grants for primary healthcare in devolved contexts.
- World Bank (IDA): Multiple programs, including the County Climate Resilience Investment (CCRI) Grant, Food Systems Resilience Project (FSRP), and the Kenya Urban Support Project (KUSP).
- SIDA & SIDA (Sweden): Agriculture business development programs.
New Obligations
National Government Obligations
- Agreement Tabling: The National Treasury must facilitate and table all agreements entered into with development partners before Parliament prior to including additional allocations in the Budget Policy Statement.
- Monthly Reporting: The Cabinet Secretary responsible for finance must publish a monthly report in the Kenya Gazette by the 15th day of each month detailing actual transfers made to counties.
County Government Obligations
- Budget Inclusion: Additional allocations must be factored into county governments' appropriation bills and budget estimates.
- Accounting: Each county treasury must reflect all transfers in its official books of accounts.
- Quarterly & Annual Reporting: County treasuries must submit reports to the National Treasury on actual transfers received, expenditures made, and compliance status with any intergovernmental agreements. Reports must also detail any material problems experienced during implementation.
Allocation Criteria for Climate Funds
For the FLLoCA County Climate Resilience Investment (CCRI) grant, allocations are split:
- First 50 Percent: Transferred based on a formula reflecting relative expenditure needs for climate action: fixed share (33.3%), rural population (30%), rural area (13.3%), and poverty (23.3%).
- Second 50 Percent: Allocated based on the performance scores of the eligible counties.
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