Governors warn of counties shutdown over withheld Sh78 billion

Governors have given the National Treasury a 14-day ultimatum to release Sh78.03 billion in delayed county allocations and restore Sh38.4 billion in diverted funds, warning that failure to do so will result in a countrywide shutdown.

Speaking on Friday, Council of Governors (CoG) Vice Chairperson Mutahi Kahiga condemned the move to withhold county funds, calling it a deliberate attempt to weaken devolution and cripple county operations.

“The Council of Governors expresses its deep concern and unequivocal condemnation of the arbitrary diversion of Development Partners Conditional Grants due to County Governments in the consideration and passage of the County Governments Additional Allocation Bill, 2025,” Kahiga stated.

According to the governors, the diverted Sh38.4 billion was meant for key county projects, including Sh24 billion allocated for healthcare, agriculture, water, roads, slum upgrading, and infrastructure.

Another Sh13 billion was earmarked for industrial parks and other projects jointly planned with the National Government.

The National Treasury has justified the cuts by claiming counties are unable to absorb additional funds within the financial year.

However, the governors dismissed this explanation, saying counties had already budgeted and committed the funds to ongoing projects.

“The right of counties to be adequately resourced is not a privilege but a constitutional guarantee,” read part of the CoG’s statement.

The governors further accused the National Government of intentionally creating a financial crisis at the county level to undermine devolution.

They pointed out that while county funds are being cut, the National Government has increased its own expenditure by Sh114 billion through the Supplementary Appropriation Act, 2025.

They warned that withholding funds would lead to a collapse of county services, making it appear as though counties were failing in their mandate.

“We demand the immediate restoration of all the diverted funds to County Governments to ensure uninterrupted service delivery, failure to which County Governments will shut down their services in the next 14 days,” the governors warned.

Additionally, the CoG called for the urgent release of Sh78.03 billion in equitable share arrears for January, February, and March.

The governors urged the Senate to stand firm against unconstitutional budget cuts and to continue safeguarding devolution.

“As we conclude, we wish to reiterate that devolution is here to stay. The people of Kenya can attest to the benefits of this system of governance,” Kahiga said.

The CoG vowed to pursue all legal and constitutional means to ensure counties receive their rightful allocations, emphasizing that the future of devolution and essential services depended on it.