Governors unveil commitments to boost industrialisation across 47 counties

County governments have pledged to provide land, matching funds, investment incentives and harmonised business levies to accelerate industrialisation, as the devolved units seek a bigger role in attracting manufacturers and expanding economic opportunities beyond Nairobi.

The counties have also committed to clearing pending bills owed to suppliers, automating business licensing, supporting local manufacturers and setting aside 30% of procurement opportunities for youth, women and persons with disabilities.

Council of Governors (CoG) Chairperson and Tharaka Nithi Governor Muthomi Njuki announced the commitments during the Industrialisation Summit at the Kenyatta International Convention Centre (KICC) in Nairobi on Wednesday.

Njuki said counties were positioning themselves as investment destinations by leveraging their constitutional responsibilities over trade, markets, cooperatives, roads, water and local planning.

"Devolution stopped asking for a seat at the national table. Now we bring the harvest to it, because we bring industries, we bring markets, we bring jobs and revenue," he said.

The commitments come as Kenya seeks to expand its manufacturing base, increase the contribution of industry to the economy, create employment and reduce reliance on imported finished products.

Manufacturing remains a key pillar of the government's economic transformation agenda, particularly under the Bottom-Up Economic Transformation Agenda, which identifies industrialisation, value addition and agricultural processing as important drivers of economic growth.

However, the sector continues to face challenges including high production costs, expensive electricity, competition from imported products, limited access to affordable financing and regulatory hurdles affecting businesses.

County governments say they can help address some of these constraints by providing industrial land, improving infrastructure, reducing licensing delays and connecting manufacturers to local markets.

The scale of the challenge is reflected in the latest economic statistics. The Kenya National Bureau of Statistics (KNBS), in its 2026 Economic Survey, reported that manufacturing contributed 7.1% of GDP in 2025, down from 7.3% in 2024.

The sector's growth also slowed to 2% in 2025, down from 3% the previous year, highlighting the difficulties manufacturers face despite the government's efforts to expand domestic production.

Manufacturing formal employment, however, increased by 5.2% to 388,600 workers in 2025, up from 369,200 in 2024, accounting for 11.7% of total formal wage employment.

The government is seeking to reverse the slow growth by increasing manufacturing's contribution to GDP to 15% by 2030, according to the proposed National Industrialisation Policy. The longer-term ambition is to raise the sector's contribution to 24% by 2063.

County governments are also expected to play a central role in achieving these targets through the County Aggregation and Industrial Parks programme, which seeks to connect agricultural production with processing, manufacturing and markets.

The programme is being implemented through a partnership between the national government and county administrations, with each level expected to contribute Sh250 million towards establishing an industrial park in every county.

Njuki maintained that the initiative was already gaining momentum, with 34 counties implementing the industrial park programme by September 2026. Eight parks had been prioritised for completion and commissioning before the end of the year, while the other 26 were under construction.

He said the facilities would support agro-processing, cottage industries and other manufacturing activities, allowing young entrepreneurs to establish businesses closer to their communities and sources of raw materials.

Beyond providing land and industrial infrastructure, the governors want to address the regulatory challenges that businesses encounter when operating across county boundaries.

Njuki said multiple permits, cess charges and levies imposed by different counties increase transportation costs and reduce the profitability of businesses supplying goods to markets across the country.

He said county governments would harmonise their licensing requirements and charges to establish a single national market where businesses can transport goods without facing multiple administrative and financial barriers.

"The third, Your Excellency, commitment that we make is we have one national market. We commit to harmonising permits, which has been requested here, I think, by the chair of Kenya Association of Manufacturers. They talked about cess and levies, which we also intend to harmonise and also remove barriers for movement of goods between counties."

The counties have also pledged to clear pending bills owed to suppliers, a move intended to improve cash flow for businesses and restore confidence in government procurement.

They will additionally honour the 30% procurement reservation for youth, women and persons with disabilities while prioritising local content in purchasing goods and services.

To improve access to investment financing, the governors committed to increasing own-source revenue, ring-fencing county enterprise funds and preparing bankable projects capable of attracting private capital and development finance institutions.

Each county will also publish an annual investment scorecard to provide investors with information on available opportunities and track progress in implementing investment commitments.

The COG Chair called for stronger collaboration between the national and county governments, particularly in financing, investment promotion and the implementation of policies affecting devolved functions.

He praised the Treasury for releasing county allocations before the 15th of each month for four consecutive months, saying predictable disbursements were necessary for counties to implement development programmes.

He urged the national government to maintain the arrangement, warning that industrialisation plans would depend on counties receiving resources on time.

The CoG chairperson also called for early consultations whenever national laws, regulations and levies affect county responsibilities, particularly in trade, licensing and markets.

"In the shared functions, let us also have shared decisions, where national laws and agencies or levies touch devolved functions such as trade, licensing, and markets in the counties. Let us be consulted early, so that we can, through intergovernmental structures, be able to remove barriers," he said.

He further asked KenInvest and Kenya Industrial Estates to enter into memoranda of understanding with the Council of Governors to formalise partnerships with all 47 counties and coordinate investment promotion.

Njuki said collaboration between national agencies, county investment institutions and private investors would help connect local manufacturers to wider markets and attract capital into regional industries.

He maintained that counties were ready to support the national government's industrialisation agenda by providing infrastructure, investment opportunities and an enabling business environment.

"Devolution is not a cost to the national budget. It is a growth strategy," he said.