Kenya’s manufacturers have raised alarm over rising and unpredictable taxation, warning that the harsh business environment is discouraging investment even as the government pursues a target of Sh309 billion in foreign direct investment by 2028.

Industry players argue that the sector, which the government counts on to spur job creation and economic growth, is being weighed down by what they term excessive levies and frequent policy changes.

Manufacturers captured the mood bluntly, saying: “We are our own enemy.”

Speaking at the forum, Bidco board chair Vimal Shah lamented the hurdles facing small businesses and criticised the country’s regulatory and tax environment, particularly its impact on start-ups.

"They block you, block you, block you, to just extract money. A small start-up has no hope in Kenya today because there is Sh100,000-Sh200,000 worth of licences," Vimal stated.

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"We have to move away from licence rush. For a start-up, there should be no licenses, one certificate, and that’s it. You start off, then once you make a certain amount of revenue, you start charging them."

Shah further stressed that Kenya must prioritise competitiveness if it hopes to attract investment into the sector.

“If we want to attract FDI into the manufacturing sector, we have to do one thing. We have to make Kenya competitive and we are competitive as Kenya. We have a good ecosystem,” he said.

Nairobi International Financial Centre CEO Daniel Mainda explained that the government is working to ease the business environment as part of its long-term strategy.

“What we are trying to ensure is that we create that enabling environment for it to be easier for people to have ease of doing business, and we want to increase our ease of doing from where we are to become a top 10 or top 6 in the continent by 2028,” Mainda said.

Officials believe that such reforms could not only secure foreign direct investment but also help manufacturers struggling with liquidity constraints.

British High Commission Manufacturing Advisor Tertia Bailey underlined the importance of the sector to Kenya’s economic resilience and youth employment.

“We are focusing on manufacturing because a strong manufacturing sector is an important part of growing any resilient economy and creating jobs, and as we all know, there's a large number of young people hitting the Kenyan job market every year,” Bailey stated.

The debate leaves the country at a crossroads: while authorities set their sights on billions in foreign inflows, manufacturers argue that the foundation for growth must be laid by addressing over-taxation and regulatory red tape.