The National Assembly has approved the County Governments Additional Allocations (No. 2) Bill, unlocking a total of Sh67.7 billion to support priority county projects in healthcare, housing, and industrial development.
Of this amount, Sh9.98 billion will come directly from the national government, while Sh57.7 billion is sourced from development partners. The legislation aims to strengthen devolution by providing targeted funding to programs that directly impact local communities.
“The Bill, sponsored by the Senate and processed by the National Assembly’s Budget and Appropriations Committee, seeks to strengthen devolution by providing counties with targeted resources to support priority programmes in healthcare, housing, industrialisation, and infrastructure,” Parliament said in a statement on Tuesday.
Under the new law, counties will receive funds for key areas such as doctors’ salary arrears, the Community Health Promoters programme, and the construction of new county headquarters.
Specific allocations include Sh250 million each for counties like Kajiado, Kericho, Kitui, Laikipia, Marsabit, Nyeri, and Vihiga to develop aggregation and industrial parks. Counties including Isiolo, Lamu, Nyandarua, Tana River, and Tharaka Nithi will receive funding to build new county offices.
The Bill also introduces a schedule allowing counties to access loans and grants from international partners. These resources will support projects such as the Food Systems Resilience Project, the Kenya Urban Support Project, the Drought Resilience Programme in Northern Kenya, the Kenya Water, Sanitation and Hygiene Programme, and the Kenya Informal Settlements Improvement Project.
Kiharu MP Ndindi Nyoro welcomed the Bill, saying it reflects Parliament’s commitment to devolution.
“This legislation ensures that counties are not only adequately resourced but are also empowered to deliver programmes that directly touch on the lives of ordinary citizens, from healthcare to affordable housing and climate resilience,” he said.
Despite the approval, governors raised concerns that a parallel government initiative is disrupting county operations.
During the 28th Ordinary Session of the Intergovernmental Budget and Economic Council (IBEC) in Nairobi, Council of Governors Chair Ahmed Abdullahi said the rollout of the electronic procurement system (e-GP) has slowed service delivery.
“The transition to the new system was rushed and poorly planned. Counties have struggled to integrate it with existing financial tools, leading to delays in salary payments and the procurement of essential supplies,” Ahmed said.
He added that some hospitals have run short of medicines and garbage collection in several towns could stall because fuel suppliers might cut off counties that could not pay on time.
Errors in the Integrated Financial Management Information System (IFMIS), which works alongside e-GP, have left some counties unable to pay workers.
“This quarter has been disastrous. We have not been able to spend money at all on account of the challenges that we’ve had,” Ahmed said during a meeting attended by Deputy President Kithure Kindiki.
Governors emphasized that while they support automation, the current system has slowed rather than improved efficiency. They warned that unless the rollout is reviewed, counties will continue to face hardships that affect service delivery and development.
The Bill will now be forwarded to the President for assent.