Trade Committee Calls for Devolved Funding of Industrial Parks

Members of the National Assembly Committee on Trade, Industry, and Cooperatives have urged the government to allow devolved units to fund and manage industrial parks within their respective counties. This suggestion comes amidst concerns that the national government is facing financial constraints in fully supporting the County Aggregation and Industrial Parks (CAIPs).

Committee’s Proposal for Devolved Funding

Committee Chairperson James Gakuya, Member of Parliament (MP) for Embakasi North, expressed his concerns during a meeting with Industry Principal Secretaries Dr. Juma Mukhwana and PS Hassan Abubakar of Investment Promotions. Gakuya highlighted that the state’s financial struggles have hampered the progress of industrial parks, suggesting that it is time for counties and other partners to step in and take over the funding of these projects.

During the meeting, PS Mukhwana disclosed that the ambitious plan to establish industrial parks in 18 selected counties has been hindered by a lack of funds. He revealed that although Sh4.5 billion was allocated to the program in the last financial year, the National Treasury released only Sh1.13 billion. This shortfall has left many of the projects incomplete and struggling to progress.

Lack of Funds and the Way Forward

The committee’s suggestion to devolve the funding of industrial parks stems from the realization that counties are already making strides in this area. PS Mukhwana noted that 20 other counties have initiated their own aggregation parks, with at least two nearing completion. This shows a growing capacity among counties to handle such projects, provided they receive the necessary support and autonomy.

In response to the PS’s disclosure, committee members, led by Gakuya, questioned the national government’s difficulties in funding the program when devolved units could potentially take over the responsibility. Gakuya emphasized the need to think innovatively, particularly during tough economic times. “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,” he stated.

Government’s Response and Future Plans

In light of the committee’s suggestions, PS Mukhwana acknowledged the potential of alternative funding mechanisms. He assured the committee that the government would consider these suggestions for the second phase of the project. This consideration marks a significant shift in approach, acknowledging the limitations of central funding and the potential benefits of decentralized financial management.

The committee’s proposal aligns with the broader agenda of devolution, which aims to empower local governments to take charge of development projects that directly affect their regions. By enabling counties to fund and manage industrial parks, the government could potentially accelerate the development of these parks, thereby boosting local economies and creating employment opportunities.

Potential Impact on the Manufacturing Sector

The successful establishment of industrial parks in various counties could have a substantial impact on Kenya’s manufacturing sector. By providing the necessary infrastructure and support, these parks can attract local and foreign investors, fostering a conducive environment for industrial growth. This, in turn, can lead to increased production, job creation, and overall economic development.

Moreover, devolving the funding and management of industrial parks can lead to more efficient and targeted use of resources. Counties are better positioned to understand the specific needs and potential of their regions, allowing for tailored solutions that can maximize the impact of these parks.

Conclusion

The call for devolved funding of industrial parks by the National Assembly Committee on Trade, Industry, and Cooperatives represents a proactive step towards addressing the financial challenges faced by the national government. By empowering counties to take charge of these projects, Kenya can harness the potential of its diverse regions to drive industrial growth and economic development. As the government considers these suggestions, the future of industrial parks in Kenya looks promising, with the potential to significantly boost the manufacturing sector and improve the livelihoods of many Kenyans.