MPs Grill CS Mbadi Over KSh68bn Shortfall in Funds For Marginalized Counties

The Equalisation Fund is owed KSh 67.92 billion by the National Treasury, leaving three-quarters of its cumulative constitutional entitlement unpaid and adding to delays in projects intended to improve basic services in marginalised areas.

• Treasury Cabinet Secretary John Mbadi told the National Assembly on Wednesday that the Fund had received KSh 22.42 billion against a cumulative entitlement of KSh 90.34 billion. 
• The disclosure came as MPs pressed the Treasury for faster disbursement and a clearer account of why money allocated to the Fund has not translated into completed projects. 
• Tiaty MP William Kamket sought details on implementation in Baringo, while Samburu West MP Naisula Lesuuda asked for a county-by-county account of disbursements and arrears.

The 2023 Equalisation Fund appropriation provided KSh 10.02 billion for projects in 1,424 marginalised areas across 34 counties. By June 2026, counties had received KSh 6.92 billion, or 69% of that allocation, leaving KSh 3.10 billion undistributed. That  was an improvement from the position a year earlier where the Auditor-General found that only KSh 2.90 billion, or 28% of the same KSh 10.02 billion allocation, had been transferred to counties by June 2025.

Baringo illustrates the implementation gap as CS Mbadi said KSh 595.03 million had been appropriated for 150 proposed projects covering 90 marginalised areas in the county. Only KSh 174.15 million, or 29%, had been transferred to the county's Special Purpose Account by June 2026. 

Of the 150 proposals, 144 had been approved but only 46 projects were between 90% and 100% complete, while 88 were less than 50% complete. Treasury attributed the slow absorption in Baringo largely to delays by the county in submitting project proposals and requisitions. 

Red Tape

The explanation points to a second bottleneck in the Fund, as even where money has been appropriated, projects still have to pass through county-level preparation and approval before funds can be used. 

The Auditor-General's findings by June 2025 support that account, listing Bomet, Bungoma, Kericho, Kitui, Lamu and Narok counties as having a combined KSh1.37 billion allocation but no approved projects because they had not submitted proposals for approval. In another 13 counties, projects worth KSh2.06 billion had been approved but had recorded zero absorption.