Kenya’s industrial challenge is mindset, not machinery, says Ndiritu Muriithi

Kenya has the machinery, skills and industrial foundation needed to become a manufacturing powerhouse, but weak policy incentives and low confidence in locally made products continue to hold the country back, Kenya Revenue Authority (KRA) Chairperson Ndiritu Muriithi has said.

Speaking in a Radio Generation interview on Tuesday, the former Laikipia governor argued that Kenya's biggest challenge is not a lack of industrial capacity but policies and attitudes that favour imports over domestic production.

Muriithi said the country already possesses the technical expertise and equipment required to manufacture a wide range of products, adding that existing industrial infrastructure remains underutilised.

“To manufacture, the primary thing you need is lathe machines,” he note, explaining that manufacturing involves “cutting, bending, forming, and so on,” and pointed to a government-owned numerical machining complex near Nairobi’s railway area, saying the facility had been established in the late 1980s and early 1990s and still contains machinery capable of producing everything.”

According to him, such facilities show that Kenya has long had the foundation for industrial growth but has failed to fully exploit it.

His remarks mirror President William Ruto’s repeated calls for the country to reduce dependence on imports and strengthen local production through industrialisation, value addition and increased agricultural productivity.

Muriithi said public perception remains one of the biggest barriers to local manufacturing, citing tuk-tuks produced in Nyeri as an example of products that are often judged unfairly despite competing well with imported alternatives.

“Our tuk-tuks are better, first of all, because it has four wheels, so their stability is better,” KRA Chair explained, adding that public criticism focused on aesthetics largely because “it’s made in Nyeri”.

He noted that Kenya continues to import products that could be manufactured locally, including agricultural machinery and water pumps, a trend he said limits job creation and weakens industrial growth.

The economist also criticised the country's industrial incentive structure, arguing that current tax policies favour imported machinery at the expense of local manufacturers.

“If you import the machines, they are tax free, but if you buy the same machines here in industrial areas, they will contain taxes,” he explained. “The incentive structure is flawed because it is favouring imported machinery instead of giving advantage to Kenyan products.”

Muriithi said efforts to address the issue during his time working with the World Bank and the Ministry of Trade did not succeed, but maintained that reforming such policies would make local industries more competitive.

He further argued that county governments could become key drivers of industrialisation through targeted interventions aimed at supporting businesses and improving revenue collection.

According to him, many counties are losing potential revenue because property records have not kept pace with rapid urban development and the growth of high-density housing projects.

The KRA chairperson said devolved governments can also lower production costs by supporting manufacturers through cheaper electricity and affordable financing.

“If you’re paying 20 or 22 US cents for electricity and your competitor in India is paying five cents, how will you compete?” he questioned.

Drawing from his experience as governor, Muriithi cited a programme in which the county government subsidised part of the interest charged to small businesses by commercial banks. He said the arrangement enabled a relatively small public fund to unlock billions of shillings in private-sector lending.

Beyond manufacturing and taxation, Muriithi criticised the state of political debate in Kenya, saying discussions have become focused on blame and ethnic divisions instead of productivity and economic growth.

“Fuel prices are high, they’re not high just for Kikuyus or Somalis or Luos,” he said. “There is no ethnic dimension in the economic problems we are having.”

He argued that economic hardships affect all Kenyans regardless of community and should be addressed through policies that expand production and create opportunities.

Muriithi also pointed to developments such as Brexit in the United Kingdom and anti-immigration sentiment in the United States as examples of how economic frustrations can shape political discourse.

The former governor further cautioned against celebrating dependence on the International Monetary Fund, describing it as “a lender of last resort”. He warned that relying too heavily on external financing could delay the reforms needed to build a stronger and more self-sustaining economy.