Counties to split Sh500m industrial park bill

Trade Cabinet Secretary Lee Kinyanjui. [Elvis Ogina, Standard]

Counties whose expenditure on the construction and establishment of County Aggregated Industrial Parks (CAIPs) exceeds Sh500 million will have to pay the extra amount.

Even as Trade Cabinet Secretary Lee Kinyanjui made this declaration, several CAIPs sites have stalled entirely or are drastically behind schedule. Tana River’s Chifiri project, for instance, stalled due to a lack of national government funding, while Nandi’s Park showed almost no active construction beyond a partial perimeter wall.

Kinyanjui told the Senate’s Trade, Investments and Tourism Committee that the national government was footing Sh250 million to each of the 47 devolved units, with a similar amount contributed by the counties to facilitate aggregation, processing, storage and value addition of agricultural and other locally available resources.

“The national government was to provide Sh250 million and the county governments were to allocate a similar amount. But in instances where a county government has spent more than Sh500 million, the extra amount is supposed to be catered for by the respective county government,” said Kinyanjui

The CS told the Committee, in a session chaired by vice chairperson Esther Okenyuri, that 10 counties are fully funded from the national government, 12 are partially funded, another 12 have not been funded but have initiated the project with their own funding, while 13 counties are yet to start the projects.

After skipping several invitations by the Committee to shed light on the implementation status of CAIPs, Kinyanjui said the national government allocated Sh4.7 billion for the project in the 2023/2024 financial year, with Sh4.5 billion meant for the construction of CAIPs in Phase One counties and Sh200 million for programme support, project coordination, monitoring and capacity building.

During the year’s Supplementary Budget, however, the allocation for CAIPs was reduced to Sh4.5 billion, and by the close of the financial year, the government had only disbursed Sh1.152 billion, resulting in an outstanding balance of Sh3.348 billion for Phase One counties.

Busia, Bungoma, Nakuru, Trans Nzoia, Migori, Homa Bay, Siaya, Kisii, Nyamira, Meru, Garissa, Mombasa, Machakos, Uasin Gishu, Kirinyaga and Embu were grouped to benefit from the Phase One allocation in the 2023/2024 financial year.

Phase II targets some 19 counties in the 2024/2025 financial year, and Phase III targets 10 counties in the 2025/26 financial year.

According to Kinyanjui, during the 26th Ordinary Session of the Intergovernmental Budget and Economic Council (IBEC) held on January 27 2025, it was agreed that the disbursement framework from the national government for CAIPS’ progress should be based on the percentage completion status.

The parties agreed that funding should be disbursed to counties whose project completion rate was above 35 per cent. These included Meru, Embu, Kirinyaga, Migori, Wajir, Kisii, Homabay, Busia, Uasin Gishu, Bungoma, Kwale, Machakos, Kakamega and Garissa, while the remaining counties were to be included in the County Governments Additional Allocation Act (CGAAA) for 2024/25.

 “Counties that are yet to initiate the project will be considered for funding in the subsequent financial years. Each county shall develop their own feasibility studies and conduct Environmental Impact assessment in line with its value chains,” said Kinyanjui.

The CS told senators that his Ministry seeks to increase the contribution of the manufacturing sector to Gross Domestic Product (GDP) from 7.6 per cent in 2023 to 15 per cent by 2027, and further to 20 per cent by 2030.