Ruto Orders Treasury to Release KSh65.9bn to Counties as Devolution Enters New Phase

President William Ruto has directed the National Treasury to facilitate the transfer of KSh65.9 billion to county governments, alongside functions that have remained under the national government despite being constitutionally assigned to counties.

The directive could mark one of the most consequential shifts in Kenya's devolution programme in recent years, potentially giving the 47 county governments greater control over functions they have long argued were transferred without adequate resources.

Speaking during the 12th National and County Governments Coordinating Summit at State House, Nairobi, Ruto said the government had completed an assessment of functions that should be transferred to counties together with the resources required to perform them.

The President said the exercise identified functions and corresponding resources valued at KSh65.9 billion.

What is the KSh65.9 billion for?

The money is tied to the principle that when a government function is transferred from one level of government to another, the resources required to perform that function should follow it.

Kenya's 2010 Constitution divided responsibilities between the national government and the 47 county governments.

Counties were assigned major responsibilities including county health services, agriculture, county roads, trade development, markets, pre-primary education, firefighting, local planning, water and sanitation services.

However, disputes have persisted over functions that counties argue remain partly controlled or financed by national government institutions despite falling within devolved mandates.

Ruto said the latest process is intended to resolve that problem.

The President directed ministries, departments and agencies still performing devolved functions to begin transferring them to counties.

Why does the transfer matter?

The dispute over functions and money has existed almost since county governments became operational in 2013.

Governors have repeatedly complained that Nairobi transfers responsibilities without transferring sufficient funding, leaving counties expected to provide services without the corresponding budgets, personnel or assets.

The latest directive therefore goes beyond simply giving governors another KSh65.9 billion.

It potentially changes who controls the money, staff, infrastructure and decision-making associated with dozens of public services.

For ordinary Kenyans, the important question is whether moving those resources closer to county governments will improve services such as healthcare, roads, agriculture, water and local economic development.

Will every county receive part of KSh65.9 billion?

Not necessarily in equal amounts.

The KSh65.9 billion represents the estimated resources attached to functions identified for transfer rather than a simple allocation to be divided equally among Kenya's 47 counties.

How much eventually reaches each county will depend on the functions being transferred, the financing mechanism and the formula used to distribute the resources.

That means a straightforward calculation of KSh65.9 billion divided among 47 counties would be misleading.

The government will need to publish detailed schedules showing which functions are moving, how their costs were calculated and how much each county will ultimately receive.

Ruto wants remaining functions unbundled

The President also directed that functions that have not yet been completely separated between the two levels of government should be unbundled.

Unbundling establishes exactly which responsibilities belong to national government and which belong to counties.

This is particularly important where responsibilities overlap.

Without clear separation, both levels of government can budget for similar activities, argue over responsibility when services fail, or leave important functions unfunded because each assumes the other is responsible.

Ruto said the process should ensure that counties receive the resources necessary to carry out their constitutional responsibilities.

Counties have complained about delayed funding

The announcement also comes against a broader dispute over county financing.

Governors have repeatedly complained that delays by the National Treasury in releasing counties' equitable share disrupt salaries, procurement, healthcare services and payments to suppliers.

County governments rely heavily on transfers from the national government because many raise only a relatively small proportion of their expenditure requirements through own-source revenue.

Delayed disbursements can therefore quickly translate into unpaid bills and disruption of essential services.

The Council of Governors has repeatedly pushed Treasury to release outstanding allocations on time.

More money also means greater accountability

Transferring another KSh65.9 billion worth of resources to devolved governments will inevitably renew scrutiny of how counties manage public money.

Auditor-General reports have repeatedly identified weaknesses across county governments including pending bills, procurement problems, unsupported expenditure, poor revenue collection and weaknesses in financial controls.

The transfer therefore creates two simultaneous obligations.

National government must stop retaining money associated with functions that constitutionally belong to counties.

County governments, in turn, must demonstrate that additional resources translate into measurable improvements in services.

What Kenyans should watch next

The most important document will be the detailed breakdown of the KSh65.9 billion.

It should establish which ministries are surrendering functions, how much money accompanies each function, which counties benefit, what happens to national government employees currently performing those duties and when the transfers become effective.

There is also the question of whether the KSh65.9 billion represents additional money for counties or resources being moved from existing national government budgets together with the functions.

That distinction matters.

If it is primarily a transfer of existing budgets, Kenya's total public expenditure may not necessarily increase by KSh65.9 billion. Instead, control of that expenditure would move from national ministries and agencies to county governments.

For Kenyans, however, the ultimate test will be simpler: does moving the money and responsibilities to counties result in better healthcare, roads, water, agriculture and other local services?