Some of the industrial development centres across the country will not be viable without supporting infrastructure, the State Department for Micro, Small and Medium Enterprises Development now says.
Principal Secretary Susan Mang’eni warned that the Constituency Industrial Development Centres (CIDCs), continue to face major infrastructure and funding challenges that are limiting their economic potential.
The facilities were established to provide shared production facilities and equipment for small businesses across the country.
The government had developed 235 of the targeted 290 centres by the end of the 2024-25 financial year, representing about 80 per cent of the target.
However, only 152 centres were fully operational, while 54 were partially operational and 58 remained non-operational.
According to the PS, the partially operational centres are constrained by inadequate machinery, incomplete infrastructure and lack of three-phase electricity, while some of the non-operational facilities face power connection challenges, land disputes, vandalism and poor access.
“The operationalisation of all the 290 CIDCs is a progressive undertaking contingent upon sustained budgetary support, availability of land and the resolution of site-specific challenges,” Mang’eni told the Trade Committee.
The State Department is targeting completion of the 232 already-built centres by the 2027-28 financial year, with the remaining 58 expected to be completed by 2028-29.
Electricity has emerged as one of the biggest obstacles to getting the facilities fully operational.
The department said it has paid Kenya Power Sh40.2 million to facilitate electricity connections to various sites, while an alternative arrangement with the Directorate of Energy Renewable Energy Cooperation has also been used to connect additional centres.
However, 57 of the 76 CIDC schemes submitted for funding remain pending, with funding identified as the main cause of delays.
Kenya Power managing director Joseph Siror, held that the delays in power connection were due to delayed submission of wiring certificates.
“From KPLC's perspective, it is timely submission of wiring certificates. I think there is a tendency at times that once the building is ready and everything is there, then KPLC just comes to connect,” said Siror.
“As part of the patient's care, we can only connect when there is a wiring certificate that confirms to us that upon connection, a fault is not going to occur.”
According to submission before the committee, in one case, an electricity connection quotation initially issued at about Sh765,000 later rose to Sh1.767 million after a delay in submitting the mandatory electrical wiring certificate.
A subsequent delay in settling the revised quotation saw the amount rise further to Sh1.892 million.
The development has triggered scrutiny from MPs over whether delays within government projects are increasing the cost of public infrastructure.
Kenya Power said quotations are reviewed to reflect prevailing prices of materials and labour when they expire, noting that the initial quotation had a 90-day validity period.
The utility also pointed to delays in the submission of wiring certificates as a major bottleneck in connecting the centres.
Beyond electricity, Mang’eni said the centres require better roads, water, security, fencing and modern equipment to become productive business hubs.
She said some centres are located in areas where supporting infrastructure is inadequate, making it difficult to generate the industrial activity initially envisaged.
Land ownership has also complicated implementation, with disputes and lack of title documents affecting some facilities.
The State Department said it is engaging the National Land Commission, county governments and other agencies to resolve the disputes.
Meanwhile, demand for equipment from young entrepreneurs is putting additional pressure on the department's limited budget.
Mang’eni said the department had requested about Sh1 billion for the current financial year because of growing demand for modern machinery and value-addition facilities, but the allocation was inadequate.
“Requests which we cannot manage” have increased as young people seek access to common-user facilities and modern technology, she said.
The department has also identified product development, certification, branding and digital marketing as major gaps preventing MSMEs from accessing formal and international markets.
More than 200 CIDCs have so far created over 12,600 jobs and facilitated the formalisation of more than 1,200 MSMEs, according to the department.
Mang’eni said the next priority was to ensure the facilities move beyond construction and equipment provision to become commercially productive centres supporting value addition and market access.
She warned that investment in industrial infrastructure would have limited impact unless electricity and other supporting services are addressed.
“Unless we address the issue of access to energy, maybe we need to consider alternative energy sources,” she said, arguing that reliable and affordable energy remains critical to Kenya's wider industrialisation ambitions.
The department is now seeking greater collaboration with Kenya Power and other agencies to accelerate connections and address the infrastructure bottlenecks holding back the centres.
