By N, KNA
Kenya’s manufacturing sector leaders have urged the government to streamline taxation processes, accelerate incentives, and promote regional exports to strengthen competitiveness and attract investment.
Kenya Revenue Authority (KRA) Chief Manager Amos Gayo acknowledged concerns over multiple audits and delayed refunds, which undermine confidence in the sector.
He disclosed that KRA has developed a centralised audit work plan to reduce duplication, with automation underway to enhance efficiency.
“Refunds remain a thorn for manufacturers. We process billions monthly, but funding from The Treasury is limited,” lamented Gayo, claiming that approved refunds can now be used to offset tax liabilities to ease cash flow pressures.
The Chief Manager was speaking during an Investment Forum: Industrials Edition hosted by the British High Commission and Manufacturing Africa where he assured that KRA is tightening enforcement against illicit imports and counterfeits, which erode the tax base and weaken the competitiveness of local industries.
Speaking at the event, Nairobi International Finance Centre (NIFC) Chief Executive Officer (CEO) Daniel Malinda warned that Kenya risks losing investors to neighbouring countries due to bureaucratic hurdles and limited incentives.
He affirmed that the NIFC is spearheading reforms to restore confidence and reposition the country as a regional investment hub.
“We have introduced a raft of incentives to attract businesses into the NIFC, and in the coming financial year, we plan to roll out further measures that will directly benefit manufacturers and SMEs,” announced Malinda.
Further, the CEO stressed that benchmarking with regimes such as Rwanda and Mauritius was critical, noting that reforms must translate into tangible opportunities for local businesses and job creation.
The Kenya Investment Authority (KenInvest) on the other hand has indicated that it is facilitating investors through a one-stop model and developing a new Business Standards Bill to protect local manufacturers and ease the investment process.
Additionally, McKinsey & Company Managing Partner Gillian Pais emphasised the role of data and capital allocation in countering imports and unlocking growth.
She noted that simple data such as retail coverage and inventory levels is often overlooked, yet it is essential for growth.
“We often see businesses keeping the dead horse alive rather than backing the winning horse,” she alluded, maintaining that strategic mergers and acquisitions remain one of the greatest sources of value creation in African manufacturing.
However, Pais cautioned that many companies lack clarity on profitability at product-line level which leads to misallocated resources.
Concurrently, Adenia Partners’ Martha Osier encouraged firms to prioritise exports as a growth driver, citing businesses with strong export bases have proven more resilient.
“Whether through the East African Community or into markets such as the Democratic Republic of Congo, exports offer both growth and a hedge against currency risks,” she pointed out, adding that in some cases, exports can be a low-hanging fruit compared to acquisitions.
Osier also pointed to growing opportunities in logistics and supply chain innovation, citing examples of Kenyan ice cream gaining traction in regional markets.
Similarly, Kingdom Business Consulting Principal Consultant Martin Horn underscored the inefficiencies in supply chains, urging companies to design customer-driven models that cut excess inventory.
“If you set up your supply chain around customer demand, you can reduce finished goods by up to 50 percent and still achieve a 100 percent service level. Smart planning allows firms to free up working capital and reinvest in resilience,” he advised.
Horn further called for performance tracking in plants and problem-solving training to eliminate recurring challenges.
In her remarks, BDO East Africa Data Analytics Manager Soumya Vadlamani highlighted the untapped potential of data in manufacturing, observing that most firms utilise less than half of the information available to them.
“Data is the goldmine. Whether production records, staff details, or customer interactions, companies must analyse what they already have before considering automation and artificial intelligence,” she urged.
Vadlamani also added that automation reduces turnaround times and costs, while AI enables firms to capture customer sentiment.
Meanwhile, on financing constraints, experts noted that many family-owned enterprises face barriers in accessing capital due to banks’ reliance on hard collateral as Osier advised exploring private equity and strategic partnerships to scale operations.
Despite the emphasis on technology and capital, experts also stressed that people and workplace culture remain at the core of transformation.
“Behind every machine and process are human beings. Embedding a culture of accountability, continuous training, and problem-solving ensures that gains in efficiency and margin are sustained,” Horn remarked.
Notably, stakeholders underscored that predictable tax frameworks, timely VAT refunds, and harmonised tariff structures within the East African Community are critical to revitalising the sector.
They urged stronger collaboration between government agencies, manufacturers, and investors to unlock growth and accelerate industrialisation in line with Kenya’s development agenda.
