Kenya Ranks Seventh in Africa’s Industrial Coverage, Overtaking Tanzania and Uganda
Kenya has been ranked seventh among African countries in industrial coverage, placing it ahead of regional competitors Tanzania, Ethiopia and Uganda. The announcement was made by Industry and Investment Principal Secretary John Mukhwana, who attributed the country’s position to increased investment in manufacturing and efforts to revive struggling industries.
Speaking during a media interview on Friday, October 30, 2026, Mukhwana described Kenya as one of the leading industrial centres in Eastern and Central Africa. He said that, across Eastern, Central and Southern Africa, Kenya was second only to South Africa in the number of industrial establishments.
The ranking is a significant development for Kenya’s manufacturing ambitions. It highlights the country’s growing industrial presence and its position as an important production and investment destination in the region. It also places renewed attention on the role manufacturing can play in creating employment, strengthening local production and reducing dependence on imported goods.
According to Mukhwana, Kenya has established itself ahead of countries such as Tanzania, Ethiopia and Uganda despite Tanzania having a larger geographical area and population. He argued that the country’s industrial performance demonstrates the importance of investment, infrastructure and deliberate efforts to expand manufacturing capacity.
The Principal Secretary further revealed that the industrial sector employs nearly 500,000 people, making it the second-largest employer in Kenya after the public service. The figure highlights the sector’s contribution to livelihoods and the wider economy, particularly through factory employment, processing activities, distribution networks and supporting businesses.
Industrial development is an important part of Kenya’s economic transformation agenda. A stronger manufacturing sector can create opportunities for skilled and unskilled workers while supporting businesses that supply raw materials, transport goods and provide services to factories.
The government has repeatedly identified manufacturing as a key driver of economic growth. The sector is expected to support job creation, expand domestic production, attract investment and increase the competitiveness of Kenyan products in regional and international markets.
Sugar industry among sectors highlighted
Mukhwana identified the sugar industry as one of the areas where the government has recorded progress through the revival of previously struggling factories.
He said several sugar factories that had become dormant before President William Ruto assumed office had since resumed operations. Among the facilities he mentioned were Chemelil, Mumias and Nzoia, which have historically played an important role in Kenya’s sugar production.
According to the Principal Secretary, the country previously had approximately 15 sugar factories that had collapsed but have since been revived and returned to operation.
He also claimed that four additional sugar factories had been established over the past four years. These include Transmara Sugar, Angata Sugar, Valley Sugar and Lupito Sugar.
Mukhwana further pointed to a new sugar factory in Tana River, saying the government was working to expand the country’s sugar manufacturing capacity.
The developments, if sustained, could strengthen domestic sugar production and reduce the pressure created by reliance on imported sugar. They could also create opportunities for farmers, transporters, factory workers and businesses operating within the sugar value chain.
The sugar industry has long been an important source of income in several parts of Kenya. Thousands of farmers depend on sugarcane farming, while factories support employment and commercial activities in surrounding communities.
However, the industry’s recovery will depend on more than reopening factories. Reliable cane supply, efficient management, timely payments to farmers, modern equipment and competitive production costs will be essential in ensuring that the facilities operate sustainably.
The government will also need to address longstanding challenges that have affected the sector, including factory debts, management disputes, production inefficiencies and competition from imported sugar.
Industrial activities remain concentrated in a few counties
Despite the reported improvement in Kenya’s industrial standing, Mukhwana acknowledged that industrial activities remain concentrated in a relatively small number of counties.
He identified Nairobi, Kiambu, Kajiado, Machakos, Kilifi and Mombasa as some of the country’s major industrial centres.
According to the Principal Secretary, these counties account for approximately 90 per cent of Kenya’s industrial establishments.
The concentration highlights the uneven distribution of manufacturing activities across the country. While established industrial centres continue to attract factories and investors, many counties have yet to develop substantial manufacturing bases.
Nairobi remains an important commercial and industrial centre because of its large market, established infrastructure and access to financial and business services. Kiambu, Machakos and Kajiado also benefit from their proximity to the capital and their connection to major transport networks.
Mombasa and Kilifi, meanwhile, enjoy strategic advantages linked to the coastal economy, port facilities and access to regional trade routes.
However, the concentration of industrial establishments in these counties presents an opportunity for the government to expand manufacturing activities beyond the traditional industrial centres.
Counties with strong agricultural production, mineral resources, livestock, fisheries and other raw materials could attract industries that process locally available resources.
For instance, areas that produce large quantities of agricultural commodities could benefit from food-processing plants, packaging facilities and storage infrastructure. Such investments would allow farmers to access more reliable markets while encouraging value addition before products reach consumers.
Expanding industrial activities to more counties could also reduce pressure on major urban centres while creating employment opportunities closer to communities.
Manufacturing investment remains central to economic growth
The reported ranking comes at a time when Kenya is seeking to strengthen its manufacturing sector and increase the contribution of locally produced goods to the economy.
Manufacturing plays a critical role in economic development because it allows countries to transform raw materials into finished products with greater economic value.
Instead of exporting agricultural products and minerals in their raw form, countries with strong manufacturing industries can process them into goods that command higher prices in domestic and international markets.
Kenya has opportunities in several manufacturing subsectors, including food processing, textiles, construction materials, pharmaceuticals, chemicals, leather products and agricultural equipment.
The expansion of these industries could support local businesses and reduce the country’s dependence on imported finished products.
It could also strengthen exports by allowing Kenyan manufacturers to supply markets across the East African Community and other parts of the African continent.
The African Continental Free Trade Area offers an additional opportunity for manufacturers to reach a wider market. However, taking advantage of this opportunity will require competitive production costs, reliable supply chains and products that meet regional quality standards.
The African Development Bank’s Africa Industrialisation Index 2025 provides further context on the continent’s industrial progress. The index assessed 54 African countries using indicators covering manufacturing performance, exports, productivity and the broader business environment.
The report ranked Kenya 11th in Africa, with a score of 0.6058, placing it ahead of Uganda, which ranked 16th with 0.5822, and Tanzania, which ranked 23rd with 0.5530.
The index is a separate measure from the industrial coverage ranking announced by Mukhwana. Nevertheless, it also identifies Kenya as one of East Africa’s stronger industrial economies.
The AfDB report found that 41 of the 54 countries assessed had improved their industrialisation scores. However, it warned that Africa continues to account for less than two per cent of global manufacturing output and only 1.4 per cent of global manufacturing exports.
This demonstrates the considerable opportunity available to African countries seeking to expand production and strengthen their manufacturing industries.
Challenges that could slow Kenya’s industrial ambitions
Although the seventh-place ranking represents a positive development, Kenya still faces challenges that could limit the sector’s expansion.
One of the major concerns is the cost of production. Manufacturers require affordable electricity, reliable water supplies, efficient transport systems and access to reasonably priced raw materials.
High electricity costs can make locally manufactured products more expensive than imported alternatives. This can weaken the competitiveness of Kenyan businesses and discourage investors from establishing new factories.
Access to affordable financing is another major concern, particularly for small and medium-sized manufacturers seeking to purchase machinery, expand production or introduce modern technologies.
Manufacturing businesses also require predictable policies and a stable operating environment. Frequent changes in taxation, regulations and other business requirements can increase uncertainty and make long-term investment decisions difficult.
The government will therefore need to maintain a business environment that encourages both local and foreign investors to establish and expand manufacturing operations.
There is also a need to strengthen technical and vocational training. Modern factories increasingly depend on workers with specialised skills in engineering, machine operation, quality control, production management and industrial technology.
Investing in skills development would help prepare more Kenyans for employment in manufacturing while reducing the industry’s reliance on specialised labour from outside the country.
Another challenge is the need to strengthen local supply chains. A manufacturing sector cannot achieve its full potential if factories depend heavily on imported inputs while local producers struggle to supply the required materials.
Developing stronger connections between farmers, local suppliers and manufacturers would help retain more economic value within the country.
A test of Kenya’s industrial ambitions
Kenya’s reported seventh-place position offers an encouraging picture of the country’s industrial presence in Africa. However, the more important question is whether the ranking will translate into tangible economic benefits for ordinary citizens.
Industrial growth must be reflected in more stable employment, better wages, increased production, stronger exports and greater opportunities for local businesses.
The reported figure of nearly 500,000 industrial workers demonstrates the sector’s importance to the economy. Expanding that workforce will require sustained investment, stronger institutions and policies that support businesses throughout the production process.
The government will also need to ensure that industrial development is not limited to a few counties. Spreading factories and processing facilities across the country could help unlock opportunities in regions with significant agricultural and natural resources.
Kenya’s position ahead of Tanzania, Ethiopia and Uganda is also likely to strengthen its profile as a regional investment destination. However, maintaining that advantage will depend on the country’s ability to remain competitive and attract industries that produce goods for both domestic and export markets.
Ultimately, the reported ranking is an opportunity for Kenya to build on its existing industrial base. The real measure of success will be the country’s ability to turn industrial investment into productive jobs, affordable locally manufactured goods and sustainable economic growth.
