Devolution and CDF: Supreme Court Limits on Funds
The Supreme Court’s 2022 decision in Institute for Social Accountability v National Assembly is often invoked in arguments about the National Government Constituencies Development Fund. That is understandable, but it can also produce a serious legal mistake. The Supreme Court decided the constitutionality of the Constituencies Development Fund Act 2013. It did not, by its formal orders, strike down every later constituency-based fund simply because it had a similar name.
The distinction has become especially important in 2026. The
separate National Government Constituencies Development Fund Act 2015 was
declared unconstitutional by the High Court in September 2024, but the Court of
Appeal set that result aside on 6 February 2026 and upheld the 2015 Act except
for part of section 43(9), which it severed. A notice of appeal to the Supreme
Court was filed after that judgment. Any current article must therefore explain
both the binding 2022 constitutional principles and the different present
appellate position of the 2015 Act.
What the
Supreme Court actually decided in 2022
Institute for Social Accountability & another v National
Assembly & 5 others, Petition 1 of 2018 [2022] KESC 39 (KLR), arose from
the long-running challenge to the Constituencies Development Fund Act 2013. The
Supreme Court unanimously restored the central constitutional conclusion
reached by the High Court: the 2013 Act was unconstitutional.
The Court examined devolution, public finance, division of revenue,
Senate participation and separation of powers. Its method was structural.
Instead of asking only whether constituency projects were socially useful, the
Court asked where the Constitution located the relevant functions, who should
administer them, how public money should move and whether legislators had
crossed from oversight into implementation.
That method remains the decision’s strongest continuing
contribution.
A
constituency is not automatically a level of government
The Constitution creates two levels of government: national and
county. Constituencies are central to political representation, but they are
not a constitutionally established third level of government.
In the 2013 CDF scheme, the Supreme Court considered constituency
machinery capable of intruding into county functions and creating parallel
local service-delivery structures. The constitutional problem was not that
national government may never spend money in a county. National institutions
necessarily operate throughout the country.
The problem arises where an ordinary statute uses constituency
structures in a way that displaces county functions, duplicates planning or
blurs responsibility for public services. A constitutional review must
therefore look beyond the name of the fund and examine what its institutions
actually do.
Why
separation of powers mattered
Members of Parliament have strong reasons to advocate for local
needs. They represent constituents, debate legislation, appropriate money and
scrutinise executive action. The 2022 Court nevertheless emphasised the
constitutional difference between those functions and executive administration.
If legislators control project selection or implementation and later
oversee the same expenditure, accountability can become circular. The person
expected to scrutinise the use of public money becomes connected with the
decision being scrutinised.
This does not mean the Constitution requires branches of government
to operate in sealed compartments. Some interaction is expressly contemplated.
The practical question is whether one institution has entered the core
operational domain of another in a way that weakens checks, balances and
traceable responsibility.
The
revenue-sharing rule is equally important
The Supreme Court also rejected the idea that Parliament could
validate the 2013 fund merely by describing the money as part of the national
government’s share. The Constitution requires nationally raised revenue to pass
through the vertical division between national and county governments before
the national government allocates money to its own agencies.
That sequencing matters because fiscal labels cannot alter
constitutional structure. Public finance is not only about whether money is
eventually spent on a legitimate public purpose. It is also about whether the
appropriation followed the constitutional route and whether the responsible
institution can be identified and audited.
The IMF Fiscal Transparency Code offers a useful, non-binding
international comparison. It emphasises comprehensive fiscal reporting,
credible budgeting and clarity about public-sector responsibilities. Kenya’s
constitutional rules are more specific and legally binding, but both approaches
recognise that fragmented or opaque fiscal structures can weaken accountability
even when individual projects appear beneficial.
Why the
2015 NG-CDF Act cannot be treated as already decided
The Supreme Court itself was careful to identify the statute before
it. The 2015 NG-CDF Act was later legislation. Although some provisions and
constitutional questions overlapped, a court still had to examine the later
statute’s actual text and operation.
That examination produced major litigation. In Gikonyo v National
Assembly, the High Court in September 2024 declared the 2015 Act, as amended in
2022 and 2023, unconstitutional and ordered the Fund to cease operating on 30
June 2026.
The legal position changed before that date. On 6 February 2026, the
Court of Appeal in National Assembly v Gikonyo & 9 others [2026] KECA 214
(KLR) set aside the High Court judgment. It held, among other things, that the
2015 Act did not generally violate devolution, separation of powers or
public-finance principles and that Senate involvement was not required in the
way the High Court had found. The Court severed the unconstitutional part of
section 43(9) tying the Fund Account Manager’s tenure to the parliamentary term
and left the rest of the Act standing.
What the
2026 development means for precedent
The 2026 Court of Appeal judgment does not erase the 2022 Supreme
Court decision. A Court of Appeal cannot overrule the Supreme Court. The two
decisions address different legislation and therefore have to be read with
care.
The 2022 Supreme Court ruling remains binding on the constitutional
defects it identified in the 2013 Act and on the principles of constitutional
interpretation it established. The 2026 Court of Appeal concluded that the
later 2015 Act, especially after amendments, was materially different in ways
that avoided most of those defects.
That produces a useful litigation rule. A party challenging a modern
fund should not simply cite the 2022 case and assume invalidity. The party must
identify the provision of the current law, show how it reproduces a
constitutional defect recognised by binding precedent and address any later
appellate judgment that has already considered the revised structure.
Likewise, a public body cannot answer every challenge by saying the
2015 Act survived the 2026 appeal. A particular exercise of power may still be
unlawful, procedurally unfair or inconsistent with public-participation and
public-finance duties even where the statutory framework itself remains
operative.
The current
position as at 7 September 2026
As at the date of this article, the Court of Appeal’s 6 February
2026 judgment is the latest final appellate merits decision identified in the
public sources reviewed for the 2015 NG-CDF Act. The respondents filed a notice
of appeal indicating an intention to challenge that judgment in the Supreme
Court.
A notice of appeal is important, but it is not itself a Supreme
Court reversal. Until a later competent order changes the legal position,
lawyers must distinguish an intended appeal from a decided appeal. The Court of
Appeal judgment therefore remains essential to any current explanation of the
2015 Act.
This is precisely why legal publishing should state dates and
procedural posture. A reader who sees only the 2022 Supreme Court decision
could wrongly conclude that the current NG-CDF framework is already void. A
reader who sees only the 2026 Court of Appeal decision could wrongly conclude
that the older Supreme Court structural principles are irrelevant. Both
conclusions are too simple.
A practical
constitutional design test
The strongest continuing value of the 2022 case is a method for
testing public funds. Identify the constitutional function the project serves.
Identify whether that function belongs to national or county government. Trace
the source and route of the money. Identify who selects, approves, implements
and audits the project. Determine whether legislators retain oversight distance
from executive administration. Consider whether the Bill in substance affects
county institutions and what bicameral procedure the Constitution requires.
The same method can be used by parliamentary counsel before
legislation is enacted, by auditors reviewing a fund and by litigants framing a
constitutional petition. It replaces arguments based on political popularity
with questions that a court can actually decide.
The method also improves public understanding. Citizens can support
a development programme while still asking whether responsibility is clear
enough to know who should be praised for success, blamed for failure or
investigated for misuse.
Why the
2022 decision still matters
The Supreme Court’s 2022 CDF judgment remains a major case on
devolution, public finance and institutional accountability. Its importance is
not a permanent judicial ban on the word “constituency.” Its importance is the
insistence that ordinary legislation must fit the governmental architecture
created by the Constitution.
The 2026 Court of Appeal decision makes accurate citation more
demanding. It requires lawyers and legal publishers to separate the invalid
2013 Act from the later 2015 NG-CDF framework and to explain the current
procedural position honestly.
That distinction also helps avoid low-value legal writing. The
useful question is not “Is CDF constitutional?” in the abstract. The useful
question is which statutory design is being examined, what functions and
financial routes it creates, what the latest binding or controlling court has
said, and whether the challenged provision reproduces a defect that the
Constitution does not permit.
Source note
This article is based on Institute for Social Accountability & another v National Assembly & 5 others [2022] KESC 39 (KLR), the Constitution of Kenya 2010, Gikonyo v National Assembly [2024] KEHC 10886 (KLR), National Assembly v Gikonyo & 9 others [2026] KECA 214 (KLR), the notice of appeal reported after the 6 February 2026 judgment, the current NG-CDF statutory framework, and the IMF Fiscal Transparency Code as a non-binding international comparison.
Suggested citation:
Ronald Serwanga, “D Devolution and CDF: Supreme Court
Limits on Funds” East Africa Legal Insight (7 September 2026).