How Kenya's 47 Counties Raise and Spend Money: A Guide to County Revenue, Budgets, and Public Participation

Every year, Kenya's 47 county governments collectively manage hundreds of billions of shillings in public funds, delivering essential services including healthcare, roads, water, agriculture, and early childhood education. Since devolution began in 2013 under the Constitution 2010, counties have become the primary service delivery units for millions of Kenyans. Understanding how counties raise revenue, receive national allocations, prepare budgets, and how citizens can participate in these processes is crucial for accountability and effective governance.

Sources of County Revenue

County governments derive their revenue from two main sources: the equitable share of nationally raised revenue and own-source revenue (OSR). The equitable share is the largest source, constituting approximately 85 to 90 percent of most counties' total revenue. The Commission on Revenue Allocation (CRA) recommends the formula for dividing nationally raised revenue between the national and county governments (the vertical split) and among the 47 counties (the horizontal split).

For the 2026/27 financial year, CRA proposed allocating KES 459 billion to county governments, up from previous years, reflecting projected national revenue growth to KES 2.9 trillion. The horizontal allocation formula considers factors including population size (weighted at 18 percent), health index, agriculture index, urban services index, poverty index, land area, fiscal responsibility, and a basic equal share ensuring every county receives a minimum allocation regardless of size.

Own-source revenue includes property rates and land rent charged by county governments, entertainment and liquor licensing fees, parking fees and market charges, single business permits issued to businesses operating within the county, outdoor advertising fees, building plan approval charges, cess on agricultural produce, and revenue from county-managed facilities including hospitals, parks, and public utilities. Top-performing counties in OSR collection include Nairobi, Mombasa, Kiambu, Nakuru, and Kisumu.

Additional Revenue Sources

Beyond the equitable share and OSR, counties access conditional grants from the national government earmarked for specific purposes such as healthcare (the Level 5 Hospital grant), roads, and emergency response. The Equalisation Fund targets marginalized areas including counties in northern Kenya and the coast. Loans and grants from development partners including the World Bank, EU, and bilateral agencies fund specific development projects. County governments can also borrow, subject to approval by the county assembly and compliance with the Public Finance Management Act.

The County Budget Process

The county budget cycle follows a legally prescribed process. Between August and October, the County Executive prepares the County Fiscal Strategy Paper (CFSP) outlining revenue projections, expenditure priorities, and fiscal targets. Between October and January, the County Treasury develops the detailed budget estimates for each department and sector. In February, the CFSP is tabled before the County Assembly for approval. By April 30, the County Executive submits the budget estimates to the County Assembly.

The County Assembly's Budget and Appropriations Committee reviews the estimates, holds public hearings, and may propose amendments. The County Assembly must approve the budget by June 30, before the start of the new financial year on July 1. Once approved, the County Appropriation Act authorizes the County Treasury to release funds to departments for implementation. The Controller of Budget must approve all withdrawals from county revenue funds, providing an additional layer of fiscal oversight.

Public Participation in County Budgets

The Constitution and the County Governments Act 2012 mandate public participation in county planning and budgeting. Citizens have the right to be involved in identifying development priorities, reviewing budget proposals, monitoring implementation of projects, and holding county leaders accountable. Counties organize public participation forums including town hall meetings, ward-level budget hearings, sector working groups, and increasingly online platforms and social media engagement.

Despite the legal requirements, effective public participation remains a challenge. Common issues include insufficient notice of meetings, forums held in inaccessible locations, technical budget documents that ordinary citizens cannot understand, failure to incorporate public input into final budgets, and lack of feedback on how citizen contributions influenced decisions. Organizations like the International Budget Partnership and local civil society groups advocate for more meaningful participation.

How Counties Spend Their Money

County expenditure falls into two broad categories: recurrent expenditure (salaries, operations, and maintenance) and development expenditure (capital projects). The PFM Act requires counties to allocate at least 30 percent of their budget to development. However, many counties struggle to meet this threshold, with personnel costs consuming 50 to 70 percent of total expenditure in some counties.

Major spending areas include health services (county hospitals, health centers, community health workers), transport and infrastructure (county roads, bridges, and street lighting), agriculture and livestock development, water and sanitation services, early childhood development education, urban services including waste management and markets, and trade and enterprise development. The quality of service delivery varies significantly across counties, reflecting differences in governance capacity, revenue base, and leadership effectiveness.

Oversight and Accountability

Multiple institutions oversee county financial management. The Office of the Auditor General audits all county accounts and publishes annual audit reports highlighting irregularities. The Controller of Budget approves quarterly fund releases and publishes county budget implementation reports. County Assemblies oversee the county executive through their Public Accounts Committees. The Ethics and Anti-Corruption Commission investigates corruption in county governments.

Citizens can access county budget documents through the County Treasury, the county assembly, and increasingly through online platforms. The Controller of Budget's website publishes quarterly reports on county revenue and expenditure. Engaging with these reports and participating in oversight mechanisms is how citizens can ensure their county government uses public resources effectively and transparently.