MPs want counties to take over industrial parks, fund stalled projects

Members of the National Assembly now want the government to consider allowing counties to fund and manage industrial parks.

This is after reports indicated that most of the projects had either stalled or failed to start due to a lack of funds.

Juma Mukhwana, the Principal Secretary at the State Department for Industrialisation, informed the MPs on Thursday that a lack of funds has hampered the ambitious plan to establish industrial parks in 18 selected counties, leaving most of the projects unfinished.

He also pointed out that the National Treasury didn't release enough funds to get the project started.

"While Sh4.5 billion was allocated to the programme in the last financial year (2023-2024), only Sh1.13 billion was released by the National Treasury," Mukhwana said.

The PS, who spoke before the National Assembly Committee on Trade, Industry, and Cooperatives, was accompanied by Principal Secretary-State Department for Investment Promotion, Hassan Abubakar.

In a bid to promote the Bottom-up Economic Transformation Agenda (BETA) through the County Aggregated Industrial Parks Programme, 18 counties were set to receive Sh4.5 billion for the project.

The funds were part of the County Government Additional Allocation Bill, 2023, which was signed into law by President William Ruto on March 4, 2024.

Bungoma, Busia, Embu, Garissa, Homa Bay, Kiambu, Kirinyaga, Machakos, and Meru counties were to host the first phase of the Industrial Parks programme.

Others were Migori, Mombasa, Murang'a, Nakuru, Nandi, Nyamira, Siaya, Trans Nzoia, and Uasin Gishu Counties.

However, as disclosed by the PS, not all funds were released. He also failed to mention which counties received the funds.

PS Mukhwana also told the MPs that 20 other counties have started their aggregation parks, with at least two nearing completion.

National Assembly Committee on Trade, Industry, and Cooperatives, during a session held on August 15, 2024. (Photo: National Assembly)

In response to the PS's disclosure, the committee, led by its chairperson, Embakasi North MP James Gakuya, questioned why the national government was struggling to fund the program when devolved units could potentially fund and manage them with the help of other partners.

"Considering the tough economic times, we must think outside the box. Regarding the industrial parks, we should forget about government funding. The industrial parks should be left to be funded by the counties and the private sector," Gakuya said.

PS Mukhwana told the MPs that the government will consider the suggestion of alternative funding mechanisms in the second phase of the project.

The meeting was prompted by a request for a statement from Mbeere North MP Geoffrey Ruku on the measures taken by the Ministry of Investments, Trade, and Industry to boost the manufacturing sector.

According to the Kenya Kwanza administration, industrial parks are seen as vital to generating employment for young people, fostering local manufacturing, and stimulating the agricultural sector.

In November 2023, the national and county governments signed an intergovernmental agreement that would set up parks in 18 counties.

This meant that the national government would contribute Sh250 million, while the devolved units would match the same amount.

Earlier that year, in February, President Ruto announced that the government would allocate Sh100 million to each county for the construction of industrial and aggregate parks.

The president said the move will enhance Kenya's productivity as the nation prioritises the consolidation, processing, and value addition of agricultural products.

Ruto also noted that the construction of county aggregation and industrial parks would unlock the industrial potential of counties across the country, broaden opportunities for Kenyans, and boost economic growth.

The parks were to also enhance the productivity of the agriculture sector sustainably, hence creating inclusive decent jobs, increasing farmers' income and foreign exchange, and stimulating growth at the grassroots as part of the government's Bottom Up Economic Agenda.

Groundbreaking events have already taken place in counties such as Garissa, Nyamira, Busia, and Kajiado.