MPs reject state plan to reallocate Sh200m initially allocated to EPZA

National Assembly's Trade, Industry, and Cooperatives Committee has rejected a proposal by the State Department of Investment Promotion to reallocate Sh200 million initially allocated to the Export Processing Zone Authority (EPZA) to other agencies.

The Committee's Chairperson James Gakuya, MP Embakasi North and other members criticised the department for pursuing the reallocation without consulting Parliament, which has oversight over the ministry's budget decisions.

Investment Promotion Principal Secretary Hassan Abubakar informed the committee that he had proposed the reallocation after discussions with the National Treasury.

According to his proposal, Sh50 million would remain with EPZA, while Sh100 million would go to the Kenya Investment Authority (KenInvest) and the remaining Sh50 million to the Special Economic Zones Authority (SEZA).

However, lawmakers argued that only Parliament has the authority to approve changes to state budget allocations.

"There is no other entity apart from Parliament that appropriates funds to state departments. You ought to have consulted this committee first. There is absolutely no justification to bypass this committee," Gakuya stated.

Aldai MP Marianne Kitany, Vice Chair of the committee, added that if additional funds were needed for other agencies, the proper approach would be to request it through Parliament during the budget-making or supplementary budget process.

Oversight admission

In response, PS Abubakar acknowledged the committee's concerns, admitting an oversight in bypassing Parliament but defended his decision as an attempt to support underfunded agencies.

Investment Promotion Principal Secretary Hassan Abubakar before the National Assembly's Trade, Industry, and Cooperatives Committee at Bunge Towers, Nairobi on November 7, 2024. (Photo: National Assembly)

"In Supplementary Budget 1, we requested funds for KenInvest and SEZA, but these entities did not receive the finances. I requested the reallocation to help them pay staff salaries," he explained, reassuring the committee that the funds had not yet been redistributed and that he would write to the Treasury to ensure they remain with EPZA.

The committee was also informed of the progress and challenges in implementing the government's flagship EPZA projects.

Due to limited funding, the State Department is prioritising three out of six initial Export Processing Zone hubs in Busia, Murang'a, and Uasin Gishu counties.

However, delays and underfunding threaten the completion timeline set for December 2024.

A parliamentary probe found that three of the four EPZA projects are only halfway developed, making the December deadline unrealistic.

The Busia project is 70 per cent complete, while the Kirinyaga, Murang'a, and Eldoret projects are at 40, 48 and 50 per cent completion, respectively.

Lawmakers urged the department to ensure equitable distribution of funds across all projects, with some questioning the prioritization of the Kirinyaga project over other regions.

"Tell this committee that you're going to take all the projects with the seriousness they deserve," Kitany said.

PS Abubakar reported that out of the Sh2.4 billion budgeted for the EPZA projects, only Sh295 million had been disbursed last year.

An additional Sh600 million has been requested for this year to accelerate progress on the projects, with plans to complete at least two to three by the end of the current fiscal year.