Sector consultancy
Kenya's public finances are being tightened from every side: a debt anchor in law, compliance-led Finance Acts, a new formula for sharing revenue among counties, and digital systems that bring county revenue and spending under closer oversight. Policy Oracle brings revenue, expenditure and value-for-money analysis to the institutions making these decisions.
The policy environment
Public finance in Kenya runs on Chapter Twelve of the Constitution and the Public Finance Management Act, 2012, which assign the National Treasury, county treasuries and accounting officers their duties and set the budget calendar for both levels of government. Each year the Division of Revenue Act splits shareable revenue between the national and county governments, and the County Allocation of Revenue Act divides the county share among the 47 counties. For 2026/27 the Division of Revenue Act, 2026 set the county equitable share at Sh428 billion after seven mediation sessions between the two Houses. The Controller of Budget authorises withdrawals, the Auditor-General audits public accounts and the Commission on Revenue Allocation recommends the basis for sharing revenue.
Horizontal sharing now follows the Fourth Basis, recommended by the Commission on Revenue Allocation and approved by Parliament in 2025 for the five financial years from 2025/26 to 2029/30. It protects each county's baseline, adds an affirmative allocation for 12 historically marginalised counties and distributes the balance by indices including population, poverty and geographical size. Own-source revenue remains the weak link: the Controller of Budget reports manual collection, outdated valuation rolls and weak enforcement. In July 2026 the Commission gazetted Standards and Guidelines on the Automation of County Own Source Revenue, while the National Treasury has advanced its own Integrated County Revenue Management System, which the Council of Governors opposes as dictating the systems counties must use.
At the national level, the Public Finance Management (Amendment) Act, 2023 replaced the nominal debt ceiling with an anchor of 55 per cent of GDP in present value terms, and the Medium Term Revenue Strategy, now in its final year, steers tax policy towards a broader base. The Finance Act, 2026, assented on 23 June 2026, leans on compliance: a tax amnesty, wider Kenya Revenue Authority powers against avoidance and prepopulated returns. Spending controls are going digital: the electronic Government Procurement system became mandatory from July 2025, and the Treasury has ordered counties to integrate it with the Integrated Financial Management Information System. The 2025 Open Budget Survey still finds no formal public participation in budget implementation or audit.
Where the pressure is
Reviewed October 2026. Each pressure traces to a law, a policy or a ruling set out below.
The 2023 amendment gives the National Treasury five years to bring public debt within the 55 per cent of GDP threshold, narrowing room for new spending through 2028. Ministries and counties must show value for money to defend their allocations in a consolidating budget.
The 2026/27 county share was settled only after seven mediation sessions, with the Senate seeking more than Sh450 billion and the National Assembly proposing Sh420 billion. Counties need evidence on the cost of devolved functions, including those still being transferred, to argue their case under the Fourth Basis.
The Commission on Revenue Allocation's 2026 standards set a compliance clock, with quarterly reporting and a 90-day remediation window, while the Treasury's integrated system remains contested by governors. Counties must decide how to modernise collection, keep ownership of their data and close the leakages the Controller of Budget has documented.
Counties faced a Treasury deadline of September 2026 to integrate e-GP with IFMIS, and the Controller of Budget now sees every county bank account. Executives and assemblies need procurement and cash management processes that hold up under real-time scrutiny.
The Finance Act, 2026 favours enforcement over new rates: an amnesty on penalties and interest where principal is paid by 31 December 2026, withholding tax on payment and digital platform charges, and expanded anti-avoidance powers. Businesses and public bodies need fiscal impact analysis of what these changes raise and whom they burden.
The 2025 Open Budget Survey scores Kenya 56 out of 100 on transparency, below the threshold for sufficient disclosure, and found no Mid-Year Review for 2023/24 and no formal public role in budget implementation or audit. National and county budget offices face pressure to publish more and to open execution to citizen monitoring.
Laws, plans and institutions
The Acts and regulations that create obligations, the policies and programmes that set direction, and the institutions that hold the mandate.
Who does what
How the Fourth Schedule of the Constitution of Kenya, 2010 divides the sector between the national government and the 47 county governments.
What we offer
Our practices combine to answer the questions this sector raises. Every assignment is scoped to the institution.
We assess revenue potential, legislation, tariffs, collection systems and enforcement stream by stream, and design strategies aligned with the National Policy to Support Enhancement of County Governments' Own-Source Revenue, 2019 and the Commission on Revenue Allocation's 2026 automation standards. The service builds on our County Fiscal Devolution Review and Revenue Mobilisation Strategy for Machakos County Government (2021).
We review budget credibility, execution, pending bills, cash management and procurement against the Public Finance Management Act, 2012 and the County Public Finance Laws (Amendment) Act, 2025. Findings are ranked by fiscal impact so that accounting officers and assemblies know which reforms to make first.
We build cost-benefit, cost-effectiveness and business case models that test whether programmes justify their cost and how they should be financed. Recent work includes the county service efficiency and cost-benefit analysis for the Consortium of County Governments (2024) and the cancer screening programme economic and business case for the National Cancer Institute (2023).
We estimate the revenue, distributional and sector effects of Finance Acts, revenue-sharing decisions and county finance laws before and after enactment. Clients receive analysis they can use in submissions to Parliament, county assemblies and the National Treasury.
We analyse how sectors are financed across the two levels of government, including transfers, pooled funds and own-source revenue, and what that spending delivers. Our 2025 economic analysis of devolved health financing and service delivery for the National Syndemic Diseases Control Council applies this method.
Our work in this sector
| Year | Client | Engagement | Practice |
|---|---|---|---|
| 2025 | National Syndemic Diseases Control Council | Economic Analysis of Devolved Health Financing and Service Delivery | Health Financing |
| 2024 | Consortium of County Governments | County Service Efficiency and Cost-Benefit Analysis | Public Finance / CBA |
| 2023 | Ministry of Devolution and ASALs | National Economic Analysis of Devolution Outcomes | Devolution Economics |
| 2022 | County Government of Makueni | Sub-County Economic Development and Devolution Impact Assessment | Devolution Economics |
| 2021 | Machakos County Government | County Fiscal Devolution Review and Revenue Mobilisation Strategy | Public Finance |
Key references
Policy environment reviewed October 2026. Laws, regulations and programmes change; consult the official text before relying on any summary here.
Public Finance and Revenue
Tell us what you need to decide and by when. We will set it against the law, policy and budget realities of the sector and propose the work.