Kenya’s manufacturing sector has called for urgent regulatory reforms to address the rising cost of regulation and duplication of levies that are undermining the competitiveness of local industries.
This emerged during the launch of the Regulatory Audit Report for the Manufacturing Sector by the Kenya Association of Manufacturers (KAM).
The study reveals that manufacturers face a complex regulatory environment characterized by multiple licensing requirements, overlapping mandates among regulatory agencies, and rising compliance costs imposed at both national and county levels.
In many cases, businesses are required to obtain numerous permits and undergo repeated inspections from different agencies regulating similar operational areas, significantly increasing the cost of compliance.
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Speaking during the launch, the Cabinet Secretary for the Ministry of Investments, Trade and Industry Lee Kinyanjui acknowledged the regulatory challenges raised by manufacturers and reaffirmed the Government’s commitment to strengthening Kenya’s industrial policy framework.
He noted that the Government is currently developing an Industrial Policy aimed at addressing key structural challenges affecting the manufacturing sector, including fiscal policy, regulatory predictability, and industrial competitiveness.
“Manufacturing remains the only sector with the strong potential to create sustainable jobs for our economy. The industrial policy which we are developing will set out solutions to many of the issues raised by manufacturers, including fiscal policy concerns and regulatory stability and predictability. While government often views regulation as necessary for oversight and revenue, industry experiences it as a cost of doing business. What is important is that we strike the right balance to ensure predictability and the sustainability of Kenyan industries, particularly as they navigate global disruptions such as delays in the shipment of raw materials and other supply chain shocks,” said Hon. Kinyanjui.
Chief of Staff at the Office of the Deputy President, Dr. Christopher Wanjau, highlighted the Government’s ongoing efforts to combat illicit trade and counterfeit goods, which continue to undermine legitimate manufacturing businesses. He noted that a multi-agency committee coordinated by the Office of the Deputy President is actively working to strengthen enforcement against illicit trade and counterfeits in order to protect compliant businesses.
“Unfair competition from counterfeit and illicit products continues to undermine legitimate manufacturers who invest heavily in quality production, regulatory compliance, and taxation. Through the multi-agency committee on illicit trade coordinated by the Office of the Deputy President, we are strengthening enforcement to ensure that businesses operating within the law are protected and that the market remains fair for local industries,” noted Mr. Wanjau.
KAM Chief Executive Tobias Alando noted that the Regulatory Audit Report provides clear evidence that regulatory inefficiencies; particularly the duplication of fees, levies, and compliance requirements imposed at both national and county levels, have become a major structural constraint to industrial growth.
He said, “The cumulative regulatory burden on manufacturers has grown significantly over time. In some manufacturing sectors, businesses must obtain more than 50 licences, permits, fees, and charges from multiple regulatory agencies at both national and county levels.
To mention just a few examples, the Pharmaceutical and Medical Equipment sector requires up to 57 licences, the Chemical and Allied sector 53, and the Food and Beverage sector 51. These overlapping mandates and rising compliance costs divert resources away from investment and innovation, ultimately weakening Kenya’s competitiveness in regional and global markets.”
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He added that unless regulatory processes are streamlined, Kenya risks losing ground in regional trade frameworks such as the African Continental Free Trade Area (AfCFTA), East African Community (EAC), COMESA, and other preferential trade arrangements including the EU–Kenya Economic Partnership Agreement and AGOA.
The report recommends harmonization of regulatory mandates among national and county agencies, improved fiscal predictability, and the adoption of county tariff pricing policies to ensure that fees and levies reflect the actual cost of services provided.
It also calls for strengthened enforcement against illicit trade and the development of a national AfCFTA implementation strategy to support Kenyan manufacturers in accessing regional markets.
Industry leaders noted that implementing these reforms would significantly reduce the cost of doing business, improve regulatory predictability, and enable Kenya’s manufacturing sector to strengthen its competitiveness both regionally and globally.
The report was developed with support from TradeMark Africa through funding from British High Commission in Kenya.
