A bitter standoff between senators and members of the National Assembly persisted during the third sitting of the mediation committee on the Division of Revenue Bill, as both sides refused to compromise on how much counties should receive in the upcoming financial year.

While senators slightly lowered their proposal to Sh425 billion, MPs maintained their hardline position at Sh410 billion, leaving talks hanging in the balance just two weeks before the start of the 2025–26 fiscal year.

The committee, which met on June 17, is tasked with unlocking the deadlock between the two Houses and ensuring timely funding to county governments. Despite pressure to find common ground, the negotiations ended in a deadlock, with senators expressing frustration over what they called bad faith from MPs.

“We have consulted amongst ourselves as senators, and it is our view that we reduce further by Ksh2 billion to arrive at Sh425 billion,” said Senator Danson Mungatana. His colleagues Boni Khalwale, Eddy Oketch, Tabitha Mutinda, Mohamed Faki and Ali Roba backed the position.

Khalwale warned that inadequate funding could stall service delivery in many counties.

“Counties should get Sh425 billion. There are counties that do not have anything for development. A county like Vihiga has five constituencies using CDF money, but the governor has nothing to do,” he said.

Senator Roba, who co-chairs the mediation committee, pointed out that counties are already under pressure from new national policies that require them to fund housing levies, community health stipends, NSSF contributions and health insurance.

“We need to find convergence as quickly as possible. Revenues to county governments have not been growing for the last six years as much,” he said.

MPs on the committee remained unmoved. Endebess MP Robert Pukose argued that counties would still benefit from additional funding outside the equitable share, such as Sh13 billion set aside for primary healthcare.

“We want to persuade our colleagues to accept the Sh410 billion, given that there are other allocations still going to counties,” he said.

Mediation co-chair Samuel Atandi reinforced the National Assembly’s position, saying debt payments were taking up a large portion of projected revenues.

“Out of the Sh2.7 trillion revenue that is projected to be realized in the coming financial year, Sh1.1 trillion will be used to pay interest on debts. That is why you realize that from our side, climbing up is very, very difficult,” said Atandi.

Still, senators remained firm, with Khalwale adding that if the actual revenue collected falls short, it is the national government’s responsibility to absorb the deficit. “Let the National Assembly listen to us and come up. If they refuse to come up, the Constitution is live. It will speak,” he said.

Pukose agreed that counties should not suffer from shortfalls, but warned against approving unrealistic figures that the exchequer may fail to disburse fully. “If we pass a figure that is unrealistic, we end up with the counties having pending bills because the exchequer is not able to release money to the counties,” he said.

The mediation committee is expected to reconvene on June 19 to continue consultations in search of consensus. Meanwhile, the uncertainty continues to raise concern among governors and other county officials awaiting funds for the next financial year.