Local manufacturers are calling on the government to urgently simplify regulations and cut down on duplicated fees that are driving up the cost of doing business, making it harder for industries to remain competitive.
Industry leaders say that rising regulatory charges, coupled with unpredictable taxes and high production costs, are discouraging investment and slowing the growth of Kenya’s manufacturing sector.
These issues were highlighted during the launch of the Regulatory Audit Report for the Manufacturing Sector by the Kenya Association of Manufacturers.
The study paints a picture of a challenging regulatory landscape, where businesses must navigate multiple licensing procedures, overlapping responsibilities among government agencies, and varying rules at county level.
The audit identifies five major hurdles that continue to weigh down manufacturers. These include inconsistent and high taxation, overlapping regulatory duties across agencies, uneven county regulations, illicit trade and counterfeit products, and excessive licensing requirements.
Such obstacles increase compliance costs and consume resources that could otherwise be directed toward growth and innovation.
The report notes that national and county regulators often require businesses to secure the same approvals multiple times, making compliance both expensive and time-intensive.
Counties have also failed to implement tariff pricing policies since the 2012 directive, leaving many fees arbitrary and growing without clear justification.
Some sectors are particularly affected. In pharmaceuticals and medical equipment, manufacturers need up to 57 licences, while chemical and allied industries require 53, and food and beverage companies face 51 different approvals.
These overlapping requirements, according to KAM chief executive Tobias Alando, drain resources from productive activities.
“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,” Alando said.
He warned that without reform, Kenya risks losing competitiveness in regional and global trade arrangements, including the African Continental Free Trade Area, East African Community, Common Market for Eastern and Southern Africa, the EU–Kenya Economic Partnership Agreement, and AGOA.
The report recommends that government agencies streamline their mandates, introduce predictable taxation, and ensure county fees reflect actual service costs.
It also calls for stronger action against counterfeit goods and a coordinated national strategy to help manufacturers leverage opportunities in regional trade.
Investments, Trade and Industry Cabinet Secretary Lee Kinyanjui acknowledged the regulatory hurdles highlighted in the report and reiterated the government’s focus on strengthening industrial policy.
He confirmed that an Industrial Policy is being developed to address key structural constraints, including fiscal predictability and regulatory efficiency.
Kinyanjui emphasized that manufacturing remains critical to Kenya’s economy, offering the greatest potential for creating stable jobs and supporting long-term economic growth.