Devolution in Kenya: How the 47 Counties Work, Revenue Sharing, Governance Challenges, and the Path Forward

Devolution is arguably the most transformative governance reform in Kenya's history since independence. Introduced through the 2010 Constitution, the devolved system of government created 47 county governments, each with elected governors, county assemblies, and executive committees responsible for delivering essential services to citizens. The system was designed to bring government closer to the people, address historical regional inequalities, enhance democratic participation, and ensure more equitable distribution of national resources. With county governments receiving KES 387 billion in equitable share allocation in the 2024/25 financial year and a proposed KES 405.1 billion for 2025/26, devolution represents one of Africa's most ambitious decentralisation experiments. Yet the journey has been marked by significant achievements alongside persistent challenges in governance, revenue collection, service delivery, and accountability.

Constitutional Foundation of Devolution

The framework for devolution is embedded in Chapter 11 of the Constitution of Kenya 2010, which establishes the two levels of government as distinct and interdependent. Article 174 outlines the objects of devolution, including promoting democratic and accountable exercise of power, fostering national unity by recognising diversity, giving powers of self-governance to the people, protecting minority rights, promoting social and economic development, and ensuring equitable sharing of national and local resources. Article 202(1) mandates that revenue raised nationally shall be shared equitably among national and county governments, with counties constitutionally guaranteed a minimum of 15 percent of the most recently audited national revenue. The Commission on Revenue Allocation (CRA) was established under Article 215 to recommend the basis for equitable sharing of revenue between the two levels of government and among the 47 counties. The Fourth Schedule of the Constitution delineates the functions assigned to each level, with county governments responsible for 14 broad functional areas.

Functions of County Governments

County governments are assigned responsibility for functions that directly impact citizens' daily lives. Healthcare is perhaps the most significant devolved function, with counties managing county hospitals, health centres, dispensaries, ambulance services, and public health programmes. Agriculture, including crop and animal husbandry, livestock sale yards, county abattoirs, plant and animal disease control, and fisheries fall under county jurisdiction. Early childhood development education and village polytechnics are managed at the county level, while primary, secondary, and tertiary education remain national functions. County transport infrastructure includes county roads, street lighting, traffic management, and public road transport. Water and sanitation services, including water supply, sewerage systems, and storm water management are county responsibilities. Other devolved functions encompass county planning and development, trade development and regulation, county public works, fire fighting services, disaster management, pollution control, and cultural activities. The breadth of these functions means that county governments are the primary interface between citizens and government services in most of rural and peri-urban Kenya.

Revenue Sharing and the CRA Formula

The distribution of nationally raised revenue among the 47 counties follows a formula developed by the CRA and approved by Parliament. The current formula incorporates multiple parameters designed to balance equity with the diverse needs of different counties. Population carries the largest weight at 45 percent, reflecting the principle that more populous counties require greater resources to serve their citizens. An equal share component at 25 percent ensures that every county receives a baseline allocation regardless of size or population. Poverty levels account for 20 percent, directing additional resources to counties with higher deprivation indices. Land area contributes 8 percent, acknowledging that geographically larger counties face higher costs for infrastructure and service delivery across vast territories. Fiscal discipline accounts for 2 percent, incentivising counties that demonstrate prudent financial management. The CRA periodically reviews and updates this formula, with the fourth basis of revenue sharing currently under consideration. The World Bank has been supporting Kenya's devolution process through technical assistance and financing, recognising it as a critical mechanism for inclusive development.

Achievements of Devolution

Despite its challenges, devolution has delivered measurable improvements in several areas. Healthcare access has expanded significantly, with counties investing in new health facilities, upgrading existing ones, and recruiting additional medical personnel. The Kenya Institute for Public Policy Research and Analysis (KIPPRA) documented substantial progress in its assessment of devolution at ten years, noting improvements in local infrastructure including county roads, early childhood education facilities, and water supply systems. Devolution has enhanced democratic participation by creating elected positions at the county level, including governors, senators, county women representatives, and members of county assemblies, providing political representation to communities that previously had limited voice in governance. Economic activity has been stimulated in county headquarters and rural areas through county government spending, procurement, and development projects. Counties like Makueni, Turkana, and Nakuru have emerged as models of innovation, implementing locally tailored solutions to healthcare, water supply, and economic development that would have been difficult under the centralised system.

Revenue Collection Challenges

One of the most persistent weaknesses of devolution has been counties' inability to generate adequate own-source revenue (OSR). In the 2023/24 financial year, OSR accounted for only approximately 12 percent of total county financing, with equitable share transfers from the national government comprising 72 percent, grants contributing 7 percent, and cash balances making up 9 percent. This heavy dependence on national transfers undermines the fiscal autonomy that devolution was intended to create and leaves counties vulnerable to delays in disbursements from the National Treasury. Counties collectively achieved only about 67 percent of their projected revenue targets, with an estimated untapped potential of approximately KES 216 billion across all 47 counties. The challenges include fragmented and poorly standardised revenue collection systems, with a patchwork of cash and automated platforms, limited enforcement capacity, political resistance to revenue measures that affect local businesses, and corruption in revenue collection processes. The CRA and World Bank have partnered to implement County Revenue Enhancement Plans aimed at building institutional capacity and modernising collection infrastructure.

Governance and Accountability Issues

Governance challenges have been a significant concern throughout the devolution journey. The Office of the Auditor General has consistently flagged irregular expenditures, procurement violations, and financial management weaknesses across county governments. Some counties have struggled with bloated wage bills that consume disproportionate shares of their budgets, leaving insufficient resources for development projects and service delivery. Political patronage in employment, procurement, and resource allocation has replicated at the county level some of the governance failures that devolution sought to address at the national level. Inter-ethnic competition for county resources, particularly in cosmopolitan counties with multiple ethnic groups, has at times generated local tensions. The capacity constraints of county public service institutions, including shortages of qualified technical and financial management personnel, have hampered effective implementation of development programmes. However, citizen engagement mechanisms including public participation in budgeting and oversight by county assemblies provide democratic accountability tools that, while imperfect, represent significant advances over the centralised system.

Intergovernmental Relations

The relationship between national and county governments has been characterised by both cooperation and tension. Disputes over revenue allocation have been recurring, with the annual Division of Revenue Bill process frequently generating disagreements between the national government, the Senate representing county interests, and county governors through the Council of Governors. Delays in disbursement of equitable share funds to counties have at times paralysed county operations, affecting salary payments, service delivery, and development project implementation. The Intergovernmental Relations Act 2012 established mechanisms for coordination including the National and County Government Coordinating Summit and the Intergovernmental Budget and Economic Council, though these frameworks have not always functioned effectively. Overlap and conflict in functions between the two levels of government, particularly in areas such as health, agriculture, and roads where responsibilities are shared or insufficiently delineated, continue to create operational confusion and duplication of efforts.

Future of Devolution

As Kenya's devolution matures beyond its first decade, the system faces critical questions about deepening its impact and addressing systemic weaknesses. The CRA has proposed increasing county allocations to KES 459 billion for the 2026/27 fiscal year, reflecting growing recognition that adequate financing is essential for effective service delivery. Strengthening own-source revenue generation through technology-driven collection systems, broadening the revenue base, and improving compliance remains a priority. Capacity building for county institutions, including professionalising the county public service and strengthening internal audit and financial management systems, will be essential. The potential for further devolution, including transferring additional functions from the national government and establishing sub-county governance structures, could bring services even closer to citizens. Kenya's devolution experience offers valuable lessons for other African nations considering decentralisation, demonstrating both the transformative potential of bringing government closer to the people and the importance of robust institutions, adequate financing, and sustained political commitment to making devolution work.