PS State Department for MSMES Susan Mangéni takes oath of office during the swearing in of Principal Secretaries at Statehouse Kenya on December 2, 2022.
A State backed project meant to provide capital for youth to start businesses and create employment could fail to take off after Principal Secretary Susan Mangeni told Parliament that her ministry lacks Sh7.6 billion to roll it out next month.
The State Department for Mico, Small and Medium Enterprises (MSME) told the National Assembly’s committee on Trade that it requires a total of Sh9.52 billion to rollout the project that is earmarked to support 101,500 beneficiaries to start-up enterprises and create self-employment.
Ms Mangeni told MPs that only Sh1.26 billion has been allocated by the Treasury in the current financial year for the project that is supposed to finance 70 youth in each of the 1,450 wards across the country.
The World Bank Funded Youth Opportunities Towards Advancement (Nyota Project) is meant to increase employment, earnings and promote savings for selected vulnerable youth at national scale.
The 5-year youth job creation project is financed by the government in partnership with the World Bank to the tune of $229 million through a credit to the government of $200 million, IDA grant of $20 million and DFF grant of $9 million.
Ms Mangeni said the project targets to benefit over 800 youth aged between 18 to 29 years and up to 35 years for persons with disability, with up to Form 4 level of education both male and female.
She said each of the beneficiaries will receive Sh50,000 to start or upgrade their businesses with the money disbursed in two tranches of Sh25,000 each.
She told the committee chaired by Ikilomani MP Benard Shinali that the project is being implemented in all 1,450 wards, 290 constituencies and all 47 counties across the country.
Ms Mangeni said the ministry is in the process of selecting and screening the 101,500 beneficiaries out of over 1 million applicants who responded to the advertisement placed in May.
She said the disbursement of funds to successful applicants will happen in three cohorts of 54,000, 30,000 and 16,000 respectively.
The PS said the ministry needs Sh2.78 billion for the first cohort of 54,000, Sh2 billion for the second cohort and Sh2.05 billion for the third cohort.
Ms Mangeni, however, shocked MPs that the project which is to be rolled out in August, 2025 targeting 101,500 youth lacked adequate budgetary allocation.
“We have a budgetary shortfall of Sh7.63 billion to enable us to roll out the project to the end of the financial year ending June 2026,” Ms Mangeni said.
“We were only received Sh1.2 billion and we have a deficit of Sh7.6 billion which we are appealing to your committee to help us get the additional funding from the Treasury.””
Appearing before the committee last evening, Ms Mangeni warned that if the Sh7.63 billion, the project risks facing the same fate of the Kenya Youth Employment Opportunities Project (Keyop) where the government ended up returning money to World Bank due to challenges of implementation of the project.
Mr Shinali wondered why the State department had failed to publish the names of those who are successful for the project so that they can know whether to still bank on the project or they should consider other options.
“You said that theSh1.2 billion available may not be enough, tell us the shortfall and when it is required. This is a nationwide programme and the number of youths who apply is huge. If you love our youth, from those you know are successful, could you publish their names so that they can know if they can still bank their hopes on this project,” Ms Shinali said.
Mathare MP Antony Alouch warned that the failure by the Ministry to roll-out the project will incite the Gen-Z to protest against the government.
“If you do not roll-out this project, you will have set a matchbox for the Gen-Z to ignite this country. We must look at a way to secure the money under Article 223 of the Constitution,” Mr Alouch said.
Vihiga Women Rep Beatrice Adagala said youth are already disillusioned with the delay in rolling out the Nyota project and asked the government to implement it fully.
Gichugu MP Robert Gichimu demanded to know why the project was advertised without the ministry securing the full funding.
