Manufacturing Sector Pushes for Policy Reforms in 2026 Roadmap

Kenya’s manufacturing sector has renewed its push for coordinated government support, warning that without deliberate policy alignment and targeted incentives, the country risks missing a critical opportunity to industrialise, boost competitiveness, and deepen intra-African trade.

The call was made during the launch of the Manufacturing Priority Agenda (MPA) 2026 by the Kenya Association of Manufacturers (KAM), a roadmap that seeks to address long-standing structural bottlenecks holding back the sector’s growth.

Despite being a key driver of employment, innovation, exports, and linkages across agriculture, services, and logistics, manufacturing contributes just 7.3 per cent to Kenya’s Gross Domestic Product. Industry players argue that this figure understates the sector’s strategic importance—and highlights the urgency of reform. High production costs, regulatory burdens, delayed VAT refunds, and limited regional trade integration continue to weigh heavily on manufacturers, even as the broader economy remains relatively stable.

Speaking at the launch, Principal Secretary for MSMEs Development Susan Mangeni reaffirmed the government’s commitment to strengthening local industry as a foundation for inclusive growth and national prosperity.

“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.”

Mangeni noted that manufacturing sits at the heart of the Bottom-Up Economic Transformation Agenda, which targets raising manufacturing’s contribution to GDP to over 20 per cent by 2030, increasing exports to 30 per cent, and attracting up to USD 10 billion in foreign direct investment through value addition, SME empowerment, and the development of industrial parks.

KAM Board Vice Chair Hitesh Mediratta urged Kenya to take lessons from global peers that have deliberately shielded and promoted domestic manufacturing. He pointed to the United States’ pro-manufacturing legislation to secure supply chains, the United Kingdom’s expanded export finance, and Vietnam’s sustained industrial growth driven by tax incentives, export zones, and policy coherence.

“Countries that prioritise manufacturing reap tangible economic benefits,” Mediratta said. “Kenya must decisively strengthen support for its manufacturing sector by enhancing competitiveness and advancing export-led growth.”

He noted that in 2024, Kenya exported goods worth over KSh 1.1 trillion, with 38.3 per cent destined for African markets—underscoring the continent’s growing importance for locally manufactured products. Fully leveraging frameworks such as the African Continental Free Trade Area (AfCFTA) and the East African Community, while addressing non-tariff barriers and lowering production costs, could unlock economies of scale and position Kenya as a regional manufacturing hub.

As global competition intensifies and African markets become more integrated, industry leaders warn that time is of the essence. The message from the MPA 2026 launch was clear: Kenya’s manufacturing future hinges on bold policy choices, stronger industrial protection, and sustained public–private collaboration to remove structural constraints and enable local manufacturers to scale.