Counties to get Sh37bn in loans, grants for development

Tuesday January 01 2019

The Treasury is set to release Sh36.9 billion in conditional allocations to county governments comprising loans and grants from development partners.

This is after President Uhuru Kenyatta unlocked the resources when he signed into law the County Allocation of Revenue (Amendment) Bill, 2018.

Mr Kenyatta assented to the Bill on New Year’s Eve, opening a window for the 47 devolved units to access Sh36,981,384,138 meant for development purposes only.


The loans and grants were sourced from World Bank, International Development Association, European Union (EU), Danida and Sweden and are meant for development of Universal Health Care, agriculture, urban support, devolution support and water protection.

The Sh36.9 will be shared among the 47 county governments, with Kiambu getting the lion’s share of Sh2.2 billion while Nairobi City County receiving the least at Sh212 million.


Some Sh17.2 billion additional conditional allocations from the national government to county governments is meant to facilitate leasing of medical equipment (Sh9.4 billion), level-5 hospitals (Sh4.3 billion) and Sh900 million to compensate county health facilities for foregone user fees.

The counties will also share Sh2 billion for rehabilitation of youth polytechnics, Sh605 million to supplement county allocation for the construction of county headquarters, Sh8.3 billion from Road Maintenance Levy, Sh3.6 billion for transforming health systems for universal care project, Sh2.9 billion for National Agricultural and Rural Intensive Growth Project and Sh11.5 billion for Kenya Urban Support Programme.

Some Sh11.5 billion will be used to establish and strengthen urban institutions to deliver improved infrastructure and services in participating counties.


Another Sh2.3 billion has been allocated for county capacity building under Kenya Devolution Support Programme, Sh4 billion World Bank funding will go towards strengthening public finance management system, Sh1.04 billion is an EU grant to support national and county government’s capacities for the management of devolution process and Sh3.8 billion for water and sanitation projects.

County governments received a total of Sh304.6 billion in shareable revenue, Sh17.2 billion in conditional allocation from national government revenue and Sh36.9 billion in loans and grants from development partners to run services in devolved units in 2018/19 financial year.

The Division of Revenue Bill 2018 had proposed to allocate county governments Sh372.7 billion in 2018/19, an increase of Sh33.3 billion from the previous year.

However, MPs amended the Bill and slashed the county funds by Sh9.4 billion when the National Assembly approved the supplementary budget. This saw the shareable revenue of Sh314 billion plunge to Sh304.6 billion.