The manufacturing sector in Kenya has called for coordinated government action to unlock industrial growth, cut production costs and expand trade within Africa, warning that without deliberate policy support the country risks falling behind regional competitors.
The appeal was made during the launch of the Manufacturing Priority Agenda (MPA) 2026 by the Kenya Association of Manufacturers (KAM), a policy blueprint outlining reforms the private sector says are necessary to strengthen industrial competitiveness and position Kenya as a regional production hub.
The agenda comes at a critical moment for an industry widely viewed as central to job creation and economic transformation but whose contribution to the economy remains modest. Manufacturing currently accounts for 7.3 percent of Kenya’s Gross Domestic Product (GDP) despite its role in generating employment, government revenue, exports and linkages across agriculture, services and logistics.
Industry leaders say structural constraints — including high electricity and logistics costs, regulatory compliance burdens, delayed VAT refunds and limited regional market integration — continue to suppress expansion and discourage investment.
Principal Secretary for Micro, Small and Medium Enterprises Development Susan Mangeni reaffirmed government support for local industry, describing manufacturing as essential to inclusive growth.
“With the right support, our local industries remain the cornerstone of job creation and sustainable growth,” she said. “We must commit ourselves to building, creating and adding value locally, and to proudly consuming and promoting products made right here in Kenya.”
The government has placed manufacturing at the centre of the Bottom-Up Economic Transformation Agenda (BETA), which targets raising the sector’s contribution to GDP to over 20 percent by 2030, increasing exports to 30 percent and attracting up to $10 billion (about KSh1.3 trillion) in foreign direct investment through value addition, SME empowerment and development of industrial parks.
KAM Board Vice Chair Hitesh Mediratta said Kenya must adopt deliberate industrial policies similar to those used by successful manufacturing economies.
“Countries that prioritise manufacturing reap tangible economic benefits,” he said. “Kenya must decisively strengthen support for its manufacturing sector by enhancing competitiveness and advancing export-led growth.”
He noted that Kenya exported goods worth more than KSh1.1 trillion in 2024, with 38.3 percent destined for African markets, highlighting the importance of the continent as a market for Kenyan products.
Manufacturers are urging the government to fully leverage regional trade frameworks such as the African Continental Free Trade Area (AfCFTA) and the East African Community, while addressing non-tariff barriers that restrict trade flows.
According to KAM, reducing the cost of production and improving cross-border trade would allow firms to scale output, achieve economies of scale and establish Kenya as a regional manufacturing base.
Globally, countries are increasingly adopting protectionist and pro-industry policies. The United States has introduced legislation and tariffs to secure supply chains and attract investment, the United Kingdom has expanded export financing to support manufacturers, and Vietnam has accelerated industrialisation through tax incentives, export processing zones and coordinated industrial policy.
Manufacturers say Kenya must respond with equal urgency.
The MPA 2026 underscores a broader reality: the future of Kenya’s industrialisation will depend on sustained public-private collaboration and coherent policy alignment. As regional markets integrate and global competition intensifies, industry leaders argue that removing structural bottlenecks is now less an option than an economic necessity.
