A major government-backed youth employment project under President William Ruto is at risk of collapse due to a significant funding shortfall on the State's part, despite heavy backing by the World Bank.

The Sh29.7 billion National Youth Opportunities Towards Advancement (Nyota) project, launched to support job creation and savings for over 800,000 vulnerable youths, is now hanging in the balance after the government failed to raise its full share of the funding.

Cooperatives and Micro, Small and Medium Enterprises Development Principal Secretary Susan Mang'eni told lawmakers that although the government was expected to contribute Sh8.82 billion, only Sh1.2 billion has been released so far, leaving a shortfall of Sh7.62 billion.

Appearing before the National Assembly’s Trade, Industry and Cooperatives Committee, Mang’eni warned that the consequences could mirror those of the Kenya Youth Employment and Opportunities Project (KYEOP), where the World Bank pulled out and demanded a refund.

“If we do not get the funding, then we will suffer the way KYEOP suffered as the World Bank took the money. However, unlike this one, KYEOP was not in the whole country but all the money had to be refunded,” she said.

“However if we get the Sh7.6 billion, we will be able to finalise all the work with that and ensure that by June next year we will have implemented the entire process.”

The Nyota project, which runs from 2024 to 2029, is funded through Nyota is a five-year programme (2024–2029) supported by a $200 million (Sh25.9 billion) credit from the World Bank, a €20 million (Sh3 billion) IDA Grant, and a €9 million (sh1.2 billion) Global Financing Facility (GFF) Grant.

It targets youth aged between 18 to 29 years, and up to 35 years for persons with disabilities, across all the 1,450 wards and 290 constituencies in Kenya. Its goal is to increase employment, earnings, and promote savings among vulnerable young people.

Mang’eni explained that the disbursement delays were due to a prolonged intake process, after the ministry received over one million applications from across the country.

Under the plan, 90,000 youths will be supported into employment or self-employment through apprenticeships, 190,000 will be enrolled in the National Social Security Fund’s (NSSF) Habahaba savings programme, 600,000 will receive catalytic funding via Access to Government Procurement Opportunities (AGPO), and 400 individuals will be certified through recognition of prior learning.

The programme is structured into four components:

• Component One, worth Sh10.63 billion, focuses on addressing labour supply constraints.

• Component Two, valued at Sh11.3 billion, targets support for small business development.

• Component Three, with an allocation of Sh2.6 billion, is being implemented by NSSF.

• Component Four, which has Sh5.2 billion, aims to strengthen youth employment systems.

Despite Mang’eni’s assurance that the project is still on course, committee members raised serious concerns about the rushed launch, lack of proper consultation, and the risk of stalling due to the funding shortfall.

Ikolomani MP Bernard Shinali questioned whether the World Bank funds were already available and criticised the short application window for a project of such national scale.

“Is this money from the World Bank with us? This project is a nationwide programme and many youths have applied yet the window provided was very short,” said Shinali.

“PS, please tell this committee, with the shortfall that is there, when do you expect to get this money? If you don’t get the Sh7.6 billion, is this project going to stall?”

Aldai MP Marianne Kitany and Gichugu MP Robert Gichimu also questioned why the State Department moved ahead with the programme when implementation had not even begun two months after its announcement.