The government has unveiled plans to establish a Sh4 billion Prison Enterprise Fund aimed at transforming prison industries into a structured, semi-autonomous entity that will boost production, training, and rehabilitation for inmates.

According to draft regulations released by Treasury Cabinet Secretary John Mbadi, the new fund will replace two existing schemes, the Prison Farms Revolving Fund created in 1993 and the Prisons Industries Revolving Fund formed in 1988.

These two funds have managed prison farms and industries for decades but will now be dissolved to pave way for a centralised enterprise with professional leadership.

“There is established a fund to be known as the Prisons Enterprises Fund. The object of the fund shall be to provide funds to support the development and operations of the prison enterprises,” the regulations state. “The initial capital of the fund shall be four billion shillings appropriated by Parliament in accordance with the Act.”

The fund will finance training and rehabilitation programmes, acquisition of equipment and machinery, and marketing of goods and services produced in prisons.

Management of the new enterprise will be overseen by a competitively recruited chief executive officer on a three-year renewable term.

A board of directors will also be formed, with representation from the public, Treasury, and the ministry in charge of correctional services.

The regulations formally revoke the two existing schemes, stating: “The Prison Farms Fund established under the Exchequer and Audit (Prisons Farms Fund) Regulations, 1993, is wound up.” A similar revocation is issued for the Prisons Industries Fund. The two had been started with a combined seed capital of Sh28 million but grew their assets to more than Sh800 million, largely supported by over 5,000 prisoners who provide labour.

Prison enterprises currently produce a range of goods including furniture, textiles, metal works, and agricultural produce, while also being responsible for manufacturing car license plates. These products are sold in exhibition outlets across the country.

However, the two funds have faced criticism from the Auditor-General for running a joint account that blurred financial accountability and for failing to adopt technology, with operations still being handled manually.

The reforms are expected to streamline management, modernise operations, and align the prison industry with broader government efforts to improve conditions for inmates while empowering prison staff.