A bitter fiscal dispute between the country’s 47 governors and the national government, led by President William Ruto, has reached a critical juncture, with county bosses threatening to paralyze services within two weeks.
The Council of Governors (CoG) has accused the National Treasury of diverting crucial development funds and delaying the disbursement of legally mandated revenue shares, pushing the devolved system to the brink.
In an extraordinary meeting held Friday, March 21, 2025, CoG, led by Nyeri Governor Mutahi Kahiga, issued a stark ultimatum, demanding the immediate restoration of diverted funds and the prompt release of outstanding revenue.
The governors’ grievances centre on the recent passage of the County Governments Additional Allocation Bill 2025, which they claim has resulted in the arbitrary diversion of billions of Kenyan shillings earmarked for vital county projects.
“The Council of Governors expresses its deep concern and unequivocal condemnation of the arbitrary diversion of development partners’ conditional grants due to county governments,” Governor Kahiga stated in a press conference.
“This blatant act is yet another attempt to systematically cripple service delivery across the 47 county governments—an affront to the devolution agenda as enshrined in the constitution of Kenya 2010,” he added.
The governors claim that the treasury’s actions will result in a loss of Ksh38.4 billion in funding.
Of this amount, Ksh24 billion represents conditional grants from international donors, intended to support critical county projects in healthcare, agriculture, water, roads, and infrastructure development. An additional Ksh13 billion, allocated by the national government for joint projects such as industrial parks, is also at risk.
“From this deduction, county governments will lose a whopping Ksh38.4 billion of the additional allocation of which Ksh24 billion are conditional grants from donors to support critical county projects in health care, agriculture, fisheries, water, roads, slum upgrading and infrastructure development.”
The CoG claims that these cuts are not isolated incidents, but rather part of a pattern of deliberate reductions in the equitable share of revenue allocated to counties, justified by the national government under the pretext of revenue shortfalls.
Paradoxically, the governors note, the national government has increased its own expenditure by Ksh114 billion in the recently enacted supplementary appropriation act 2025.
“This latest move is not an isolated incident but rather a continuation of deliberate and unjustified reduction of equitable share of revenue under pretext of revenue shortfalls.
“On the contrary, the national government has increased its expenditure by at least Ksh114 billion in the recently enacted supplementary appropriation act 2025,” COG said.
The governors further contend that the National Treasury’s assertions regarding counties’ inability to absorb additional allocations are fallacious.
“These fallacious assertions depict how the national government casually handles the devolution agenda. It should be noted that counties had already made commitments to finance the ongoing projects,” Governor Kahiga stated.
The CoG accuses the national government of a deliberate strategy to undermine devolution.
“It is becoming increasingly apparent that this systematic budgetary cuts are designed to cripple county governments, hinder effective service delivery and ultimately discredit and kill the devolved system of government. By purposefully underfunding county governments, the national government is creating a crisis only to turn around and put counties on the spot for failing to deliver essential services. This is a well-orchestrated scheme aimed at frustrating devolution and rolling back the gains made over the past decade.”
The governors have issued a 14-day ultimatum, demanding the immediate restoration of all diverted funds.
They also insist that the National Treasury release the equitable share of revenue, which they say is three months in arrears.
Failure to comply, they warn, will result in a complete shutdown of county services.
“In this regard, the council of governors 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 its services in the next 14 days. Further, we demand that the National Treasury immediately releases the county equitable share which is in arrears of three months.”
Martin Oduor
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