Kenya's manufacturing sector is experiencing an alarming exodus as escalating production costs, burdensome taxes, and uncompetitive conditions force companies to shut down or relocate to neighboring countries like Uganda and Tanzania.

• Kenya Association of Manufacturers (KAM) states that the primary driver is soaring manufacturing costs, not recent protests, although they worsened the situation.
• The imposition of excise duty on raw materials and a high tax burden make local goods more expensive than imports.
• Recent anti-government demonstrations caused significant disruption, with two-thirds of firms signaling plans to cut jobs and 62.5 percent of manufacturers suspending new investment plans.
• High-profile companies, including Foton Motors, CMC Motors Group, Procter & Gamble (P&G), Foschini Group, Copia Kenya, Twiga Foods, and Base Titanium, have exited or scaled down operations in Kenya since 2024.
• KAM calls for urgent tax rationalization, uniform application of East African Community's (EAC) Common External Tariff, and regulatory clarity to salvage the sector.