Improve County Governments Capacity to Generate Own Income
The Kenya Kwanza government promised to improve county governments’ capacity to generate their own income and reduce their over-reliance on transfers from the national government.
Two Own Source Revenue Growth Conferences have been held so far, and county officials have been urged to take advantage of the insights to find new ways of generating income at the county level. Counties have also started preparing their revenue enhancement action plans.
The 2026 Budget Policy Statement reported that In FY 2024/25, County Governments collectively generated KSh 67.3 billion in Own Source Revenue (OSR) against an annual target of KSh 87.7 billion, representing a performance rate of 76.8 percent.
In the first quarter of FY2025/26, counties collected KSh13.94 billion, which was 10% higher than the KSh12.68 billion collected in the same period the previous year.
However, counties remain heavily dependent on national transfers. For FY2025/26, counties expected KSh415 billion from the equitable share, compared with KSh93.89 billion in own-source revenue. Morever, the World Bank has similarly found that OSR accounts for only around 12–13% of the total county financing which further indicates the continued dependence on national transfers.
