Kenya's manufacturing sector is facing severe pressure from a flood of cheap imports and counterfeits, according to the Kenya Association of Manufacturers (KAM). These illicit trade practices are eroding the competitiveness of local industries and forcing businesses to shut down or relocate.

• Kenya loses approximately Sh800 billion annually to counterfeit goods, with China identified as the primary source.
• Chief Executive Officer Tobias Olando of KAM cited dumping, under-invoicing, and substandard products as major threats.
• Automotive spare parts account for the largest share of seized counterfeits at 39 percent, while agricultural inputs show the highest incidence at 89.16 percent.

A recent Central Bank of Kenya (CBK) stress test reveals that while Kenya's banking sector shows improved resilience, it faces significant risks from rising non-performing loans (NPLs) and cyber-attacks, particularly impacting smaller lenders.

• The sector's NPL ratio climbed to 17.1% in December 2024 and 17.6% by April 2025.
• Bank of Africa and Sidian Bank remain under-capitalized, having consistently failed the test since 2022.
• A severe stress scenario could push the NPL ratio to 21.2% by December 2025, requiring KSh 5.1 billion in fresh capital for six banks.
• Eleven banks were below the new KSh 3 billion minimum core capital requirement as of June 2025, needing KSh 14.7 billion to comply.
• Cyber-attack losses could reach KSh 2.9 billion in a severe case, causing five banks to fall below the Core Capital Adequacy Ratio (CAR).

Kenyan national and county governments are consistently breaching the 35% wage bill cap, with salaries significantly outpacing revenue growth and crowding out development spending. New data from the Salaries and Remuneration Commission (SRC) highlights a critical fiscal challenge as personnel costs consume a disproportionate share of public funds.

• County governments' wage bill-to-revenue ratio reached a peak of 54.7% in the third quarter of the financial year ending June 2025, far exceeding the legal threshold. It is projected to close the year at 48%.
• The national government's wage bill, while more contained, also frequently breached the 35% cap relative to ordinary revenue, surging to 43.7% in the third quarter.
• The public sector workforce expanded by 3.1% in 2024, surpassing one million employees for the first time, with the Teachers Service Commission (TSC) remaining the largest employer at 410,700 employees.