Cabinet Secretary for Investments, Trade and Industry Lee Kinyanjui has defended the implementation of the County Aggregation and Industrial Parks (CAIPs) programme, outlining budget allocations, disbursement challenges and intergovernmental coordination issues when he appeared before the Senate Standing Committee on Trade, Industrialization and Tourism at Bunge Towers on Thursday, May 14, 2026.
The CS told senators that the programme, which is intended to spur industrialisation at the county level through value addition and aggregation, had initially received Sh4.7 billion in the 2023/2024 financial year.
Of this, Sh4.5 billion was earmarked for construction in phase one counties while Sh200 million was allocated for programme support, coordination, monitoring and capacity building.
However, Kinyanjui said budget revisions reduced the allocation to Sh4.5 billion, of which only Sh1.152 billion had been disbursed by the end of the financial year, leaving an outstanding balance of Sh3.348 billion.
In the 2024/2025 financial year, the State Department for Industry received Sh2.9 billion for construction works, though the ministry still faced a funding gap of Sh448 million required to complete phase one projects.
“The Intergovernmental Budget and Economic Council (IBEC), during its 26th Ordinary Session held on January 27, 2025, directed that implementation of the programme be fast-tracked and that future disbursements be tied to project completion rates,” Kinyanjui said.
He added that prioritisation of counties was based on progress made on the ground.
“Following consultations between the State Department for Industry and the Council of Governors, counties with project completion rates above 35 percent were prioritised for funding,” he said, listing Meru, Embu, Kirinyaga, Migori, Wajir, Kisii, Homa Bay, Busia, Uasin Gishu, Bungoma, Kwale, Machakos, Kakamega and Garissa among the beneficiaries.
A joint monitoring and evaluation exercise conducted by the State Department for Industry, the Council of Governors, the Office of the Deputy President and the Ministry of Public Works established varying levels of progress across counties.
According to the CS, 10 counties had been fully funded, 12 partially funded, 12 had initiated projects using their own resources, while 13 counties had not yet begun implementation.
The ministry has recommended that counties which are partially funded or have already initiated works be prioritised in the 2025/2026 budget cycle.
“Counties that are partially funded and those that have initiated the project with their own funding be prioritised in the 2025/2026 budget allocation,” Kinyanjui said.
During the session, senators pressed the ministry on implementation inconsistencies, feasibility studies, infrastructure readiness and governance frameworks.
Senator George Mbugua questioned disparities in county readiness and funding structures, citing concerns over special purpose accounts and infrastructure commitments.
In response, Principal Secretary for Industry Gachoka Mukhwana clarified that implementation followed agreed procurement and financing arrangements with counties, noting that the national government’s role was primarily disbursement of its financial share.
“The role of the National Government was to disburse our section of the money,” the PS said, adding that counties acted as the procuring entities for their respective projects.
Senators also raised concerns about infrastructure gaps, including roads and electricity connections. PS Mukhwana explained that additional support needs had been identified during field visits, with requests made to relevant national agencies.
Senator Esther Okenyuri questioned the adequacy of feasibility studies and Bills of Quantities (BoQs), particularly in cases where project expectations differed across counties.
In response, the PS said a uniform design and BoQ had been adopted nationally after consultations with the Council of Governors to control costs and ensure standardisation.
On land disputes affecting implementation, Mukhwana cited Mombasa County as an example where legal and technical challenges had delayed progress, but said discussions were ongoing to resolve the issues.
He further told senators that counties were responsible for feasibility studies and environmental impact assessments, a decision agreed upon during consultations in 2023 to allow alignment with local priorities.
However, the CS noted that a proposal for a national feasibility study had been tabled to improve coordination, though it had previously faced reservations from county leadership.
“The Ministry insisted on having a study done,” Kinyanjui said, emphasising the need for evidence-based planning in future phases.
The ministry also highlighted that CAIPs are designed to integrate agricultural production, processing, manufacturing and market access through structured value chains, with the aim of boosting industrial output at the county level.
On governance, Kinyanjui told the committee that county governments remain responsible for developing management structures in consultation with the Council of Governors under the Intergovernmental Partnership Agreement (IPA) signed between the two levels of government.
He also clarified that counties are required to open Special Purpose Accounts for the programme, while the national government disburses funds through County Revenue Fund mechanisms.
On financing mechanisms, the CS said there was currently no formal framework between the ministry, counties and the Kenya Development Corporation (KDC) for equipping the parks, though enterprises operating within CAIPs could still access financing facilities, including Afreximbank-supported credit lines for machinery acquisition.
“Enterprises operating within the industrial parks could benefit from financing facilities supported through KDC, including the AfriExim facility aimed at helping MSMEs acquire machinery and equipment at affordable rates,” he said.
The Senate Committee is expected to compile its findings and recommendations on the programme as scrutiny over infrastructure delivery and intergovernmental coordination continues.