At the heart of the negotiations is Clause 5, a provision designed to shield devolved units from sudden spending cuts when national revenues fall short of projections.
Senate Finance and Budget Committee Chairman Ali Roba described the clause as essential to safeguarding devolution.
“The purpose of Clause 5 is to insulate counties from arbitrary expenditure cuts due to revenue shortfalls. This clause is critical as it gives effect to Article 219 of the Constitution,” Roba said.
The development comes as the Senate and National Assembly continue negotiations over the equitable share of revenue allocated to counties.
While the National Assembly initially proposed Sh420 billion and the Senate Sh450 billion, the two sides have gradually moved closer. The National Assembly has increased its offer to Sh425 billion, while the Senate has reduced its demand to Sh440 billion.
For county governments struggling with delayed projects, pending bills and growing service delivery demands, the outcome of the talks could have far-reaching consequences.
“The counties will smile at Sh440 billion. We are aware of the economic situation, but we must still support devolution,” Roba argued.
Migori Senator Eddy Oketch maintained that counties require even more support, noting that technical assessments place the ideal allocation at around Sh445 billion.
His position reflects growing concerns among county leaders who argue that rising costs and delayed transfers have slowed development initiatives across the country.
However, National Assembly Budget Committee Chairman Samuel Atandi cautioned against adopting figures that exceed current revenue realities.
“We are here to undertake a constitutional responsibility. The economy is not capable of raising sufficient revenue to meet all competing demands. We must be realistic,” he said.
Despite the differences, lawmakers say the negotiations have been marked by compromise and goodwill, raising hopes that a final agreement could be reached in the coming days.
Should consensus be achieved, the Division of Revenue Bill, 2026, will provide a framework for continued financing of county governments while ensuring national programmes remain adequately funded.
