Treasury withholds Sh34.6bn as counties await July disbursement
Data from the Exchequer shows that in July — the opening month of the 2025/26 fiscal year — no equitable share was disbursed to counties despite a budgeted allocation of about Sh34.6 billion
The Treasury failed to release funds to counties in July, starting the new financial year with a cash freeze that has left devolved governments without their expected share of revenue.
Data from the Exchequer shows that in July — the opening month of the 2025/26 fiscal year — no equitable share was disbursed to counties despite a budgeted allocation of about Sh34.6 billion.
Counties are expected to receive Sh415 billion in equitable share by the end of June 2026, as outlined in the County Allocation of Revenue Bill, 2025.
“The equitable share allocation to county governments is Sh415 billion as per the County Allocation of Revenue Bill, 2025,” Treasury noted in the statement of actual revenues and net exchequer issues as at July 31, 2025.
The failure marks a setback for the Treasury, which had only just closed the 2024/25 financial year without arrears to counties.
That was a rare achievement, given that it had previously ended years with pending bills.
For instance, at the close of June 2024, Treasury still owed counties Sh30 billion from the 2023/24 budget, which was carried forward to the following year. By June 2025, however, the full equitable share had been released.
In addition to the Sh415 billion equitable share, counties are also expecting Sh93.5 billion in grants during the current financial year.
“The County Governments Additional Allocations Bill, 2025 provides for extra allocations to county governments in the financial year 2025/2026 amounting to Sh93,533,610,590 to be disbursed through the respective Ministries, Departments and Agencies,” Treasury stated.
County governments depend heavily on these transfers to run operations, pay workers, finance development projects, and clear pending bills to contractors.
But delays have been a recurring problem, often linked to revenue shortfalls and heavy national debt repayments, especially to China.
Counties set to receive the highest allocations this year include Nairobi (Sh21.4 billion), Nakuru (Sh14.4 billion), Turkana (Sh13.9 billion), Kakamega (Sh13.7 billion), Kiambu (Sh13 billion), Kilifi (Sh12.8 billion), and Mandera (Sh12.3 billion).
At least 12 counties will each receive more than Sh10 billion, alongside grants and revenue raised locally through fees and levies.
