Kenya’s county governments collected just over half of their targeted own-source revenue during the first nine months of the 2025/26 financial year, highlighting persistent challenges in local revenue mobilization despite an overall improvement compared to the previous financial year.
According to the County Governments Budget Implementation Review Report for the First Nine Months of FY2025/26by the Controller of Budget Margret Nyakang’o, county governments generated Sh.53.88 billion in own-source revenue between July 2025 and March 2026, representing 54 per cent of the annual target of Sh.100.13 billion.
The COB Nyakang’o’ s report indicates that the combined county budgets approved by county assemblies amounted to Sh.633.30 billion, with Sh.234.33 billion (37 percent) allocated for development expenditure and Sh.398.97 billion (63 percent)earmarked for recurrent expenditure.
‘’County Governments are expected to receive their equitable share of nationally raised revenue for FY 2025/26, amounting to Sh.415 billion. Own Source Revenue is estimated at Sh.100.13 billion, including Appropriations in Aid (A-i-A) and Facility Improvement Financing (FIF) of Kshs.30.12 billion and ordinary OSR of Sh.70.01 billion. Also, County Governments projected Additional Allocations of Sh.71.98 billion. ‘’ Nyakang’o reports.
County governments had a total of Sh.386.59 billion available for spending during the review period. This comprised Sh.275.98 billion from the equitable share of nationally raised revenue, Sh.53.88 billion from own-source revenue, Sh.23.68 billion in additional allocations and Sh.33.05 billion carried forward from the 2024/25 financial year.
Despite falling short of the annual revenue target, the report notes that counties improved their collections compared to the same period in the previous financial year. The Kshs.53.88 billion realised during the reporting period exceeded the Sh.45.91 billion collected over a similar period in FY2024/25.
The review also shows significant variations in revenue performance across counties. While some counties exceeded their targets for Appropriations in Aid and Facility Improvement Fund collections, many continued to underperform in ordinary own-source revenue, reflecting disparities in local revenue generation capacity.
The findings are expected to inform policy interventions aimed at strengthening county revenue administration, improving fiscal sustainability and reducing dependence on transfers from the national government.
The Budget Implementation Review Report provides Parliament, county assemblies and the public with an assessment of how county governments are implementing approved budgets and managing public finances during the 2025/26 financial year.
