Only 152 of the 235 Constituency Industrial Development Centres (CIDCs) built by the national government at a cost of Sh3 billion are fully operational, with 54 partially operational and 58 remaining idle due to funding, power, land and infrastructure challenges.
The State Department for Micro, Small and Medium Enterprises Development has told the National Assembly Trade Committee that the centres established to provide small businesses with shared production facilities and equipment, have struggled to take off despite the government’s push to establish 290 such facilities across the country.
Principal Secretary for Small and Medium Enterprise (SMEs) Susan Mang’eni said the partially operational centres are not being used since they are constrained by inadequate machinery, incomplete infrastructure and lack of three-phase electricity.
According to the PS, some of those that are completely non-operational are yet to secure power, have unresolved land disputes or have been affected by 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,” Ms Mang’eni told the committee.
As a result, all the centres have struggled to operate and attract business. The scale of the investment behind the centres has also raised questions over the value of infrastructure that remains idle.
In the three financial years to 2022, the government said it had invested more than Sh1.3 billion in infrastructure, equipment, electricity connections and water for more than 150 centres.
The programme was allocated another Sh326 million in 2024-25, although this reduced to Sh108.8 million in the 2025-26 financial year. A 2025 Parliamentary Budget Office document also proposed Sh600 million to accelerate completion of the 290 CIDCs
The disclosures have raised questions over whether the government’s focus on constructing the facilities has moved faster than efforts to put in place the infrastructure and resources required to make them productive.
MPs questioned delays affecting the centres including the cost of connecting them to electricity and whether administrative bottlenecks within government agencies were contributing to the rising cost of public projects.
Principal Secretary for Micro, Small and Medium Enterprises Susan Mang’eni speaks during the 7th MSMEs Conference and Expo at the Sarit Centre in Nairobi on March 13, 2026.
Photo credit: File | Nation Media Group
Electricity emerged as one of the biggest obstacles to operationalising the facilities, with the State Department saying it has paid Kenya Power Sh40.2 million to facilitate connections to various sites.
An alternative arrangement involving the Directorate of Energy Renewable Energy Cooperation has also been used to connect additional centres, but 57 of the 76 centre schemes submitted for funding remain pending.
Kenya Power Managing Director Joseph Siror attributed some of the delays to failure to submit electrical wiring certificates, saying the utility could not connect facilities before receiving certification that the buildings were ready to safely receive power.
“From KPLC's perspective, it is timely submission of wiring certificates,” Mr Siror said.
He said the certificates were necessary to assure the utility that connecting the facilities would not result in faults.
“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,” he said.
But the PS accused KPLC of deliberately delaying the connection of electricity to the facilities leaving thousands of youth under the National Youth Opportunities Towards Advancement (NYOTA) projects frustrated.
Deputy President Kithure Kindiki (centre) with youths during the launch of the second phase of the National Youth Opportunities Towards Advancement (Nyota) programme at the ASK Showground in Nakuru on July 10, 2026.
Photo credit: DPCS
“These are our young people they are suffering and they need to make use of these centres. They are hardworking but KPLC is taking us round in getting the required electricity to get the centres operational for no reason. We gave them all the certificates but they have deliberately looked the other way,” she said.
She added that the high cost of installing three-phase electricity was delaying the opening of completed centres, warning that public money risked being wasted if the facilities remained unused.
“Unless we reconsider the issue of power to these projects, we will use public resources to construct them, but they will never be operationalized due to the high cost of installing three-phase power connection to the site,” she added.
Mr Siror however dismissed the PS insisting that KPLC is a publicly listed company owned by private and government and is accountable to both entities.
“The government currently owes us Sh34 billion from last mile connectivity. As Kenya Power, we are a business and there are investors who are waiting for their dividends. These are people who have not received their dividends for the past 7 years. We cannot go ahead and do charity work since connecting electricity is expensive. We must be paid by government before we engage in the connection of electricity to these centers,” he said.
Committee Session Chairperson and Gichugu MP Robert Gichimu urged the power utility firm to work with the State Department to expedite electricity connections, particularly in centres that have already been completed but are not in operation.
“These centres are very key in addressing the employment gap and allowing small businesses to grow. It is therefore critical to ensure the projects are completed in time and operationalised,” said Mr Gichimu.
The delays in completing electricity connections have, in at least one case, resulted in a sharp increase in the amount required to connect a centre. The committee was told that an electricity quotation initially issued at about Sh765,000 later rose to Sh1.767 million after delays in submitting the mandatory wiring certificate.
The figures prompted scrutiny from MPs over whether delays in Government projects were increasing the cost of infrastructure that had already been budgeted for.
Kenya Power said quotations are reviewed to reflect prevailing prices of materials and labour when they expire, noting that the initial quotation had a validity period of 90 days.
But even where power is available, the centres face other infrastructure and operational challenges.
Ms Mang’eni said some facilities lacked adequate roads, water, fencing and security, while others required modern machinery before they could operate at the scale intended by the government.
Land ownership has also complicated implementation, with disputes and lack of title documents affecting some projects.
The State Department said it is engaging the National Land Commission, county governments and other agencies to resolve the disputes and clear the way for the affected facilities to become operational.
A total of 235 of the targeted 290 centres have so far been developed, equivalent to about 80 per cent of the target, but it still has a significant funding requirement to complete and equip the facilities.
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.
The centres are intended to give small businesses access to shared machinery and production facilities that would otherwise be too expensive for individual entrepreneurs to acquire, while supporting value addition, job creation and formalisation of businesses.
According to the State Department, more than 200 Centres have so far created over 12,600 jobs and facilitated the formalisation of more than 1,200 MSMEs.
PS Mang’eni said the department had requested about Sh1 billion during the current financial year to finance modern machinery and value-addition facilities, but the allocation was inadequate.
She said requests from young people seeking access to common-user facilities and modern technology had increased, leaving the department with a growing number of requests it could not meet.
“We have noticed that our young people are very entrepreneurial but our lack of funds is holding them down. We urge MPs to support our quest in additional allocations,” she said.
The funding gap comes as the national government seeks to position MSMEs as a major source of jobs and economic growth, particularly for young people.
The challenges also go beyond machinery and physical infrastructure, with product development, certification, branding and digital marketing also limiting the ability of small businesses to access formal and international markets.
PS Mang’eni said the next priority was to ensure the centres moved beyond construction and equipment provision and became commercially productive hubs supporting value addition and market access.
