The government is struggling to monitor the construction of County Aggregation Industrial Parks (CAIPS) amid a cash crunch that has threatened one of President William Ruto’s key promises.
The State Department for Industry has in recent months been unable to make visits to sites where the CAIPS are being implemented in 18 counties, an audit has revealed citing “insufficient funds.”
“As at the time of audit in November 2024, it was noted that the State Department did their last visits in April 2024 citing insufficient funds,” Auditor-General Nancy Gathungu states in a new report.
The audit notes that the failure to make regular visits to sites where construction of CAIPS is happening across the country contravenes the agreement for the implementation of the centres for value addition, which stipulates that regular visits be undertaken in the counties.
The lack of continuous supervision of the programme, the audit observes, may affect the implementation of the projects and creates uncertainty on the programme.
The funding challenges have, however, not only affected the State Department’s oversight role, but also the construction of the centres that the national government has marketed as its main strategy to boost value addition in counties.
During the year ended June 2024, the Treasury cut the budget for construction of CAIPS in 18 counties from Sh4.5 billion to Sh1.15 billion.
The 74 percent slash in the budget underscores the funding challenges the programme continues to face, and has implications for the original timeline of completion by June 2025.
“Review of the approved budget for the 18 counties in respect to CAIPS revealed an allocation of Sh250,000,000 per county totaling Sh4,500,000,000. However, during the year under review an amount of Sh1,152,000,000 was remitted resulting in an underfunding of Sh3,348,000,000 or 74 percent of the budget,” the audit said.
The government initially planned to construct CAIPS across all 47 counties between July 2023 and June 2025, with the county and national governments sharing equally the Sh500 million cost of each CAIP.
The national government, however, slashed its budget for the programme from Sh9 billion to Sh3.25 billion for the 2023/24 and 2024/25 fiscal years as it faced funding challenges.
A report by Parliament’s budget committee last year showed that the government only released Sh62.5 million towards each of the 18 counties that were constructing CAIPS in the year to June 2024.
In the report, Treasury blamed funding shortfalls following the rejection of the Finance Bill, 2024, for the failure to disburse enough funding to the programme.
The Treasury then slashed the CAIPS budget for the current fiscal year by 56 percent.
“As such, there could be a need to revise the implementation framework of the programme and consider focusing on completing the first 18 CAIPS in the financial year 2024/25,” Parliament’s Budget Committee said.
