NAIROBI, Kenya — Kenya’s trade and investment regime remains among the most restrictive for an emerging market, with high tariffs, stringent non-tariff barriers, and foreign-ownership caps that undermine competition and deter global investors, a new report by the World Bank and CAK has revealed.
The report shows that Kenya scores significantly higher than peer countries on barriers to trade and investment, citing tariff escalation on critical inputs and strict screening rules for foreign investors. It warns that these policies reduce competitiveness, raise production costs, and suppress job creation.
“Kenya’s tariff structure continues to impose heavy costs on manufacturers and limits the country’s integration into regional and global value chains,” the report states.
Applied tariffs remain notably high compared to global averages, particularly for industrial inputs and agricultural commodities.
Foreign ownership caps in key sectors—including aviation, telecommunications infrastructure, and selected service industries—further discourage capital inflows.
Kenyan exporters have repeatedly complained that tariff and regulatory barriers raise input prices and undermine their ability to compete in the East African Community (EAC) and beyond.
Meanwhile, non-tariff measures—such as licensing hurdles, standards compliance delays, and discretionary inspections—add layers of uncertainty and cost.
The report urges Kenya to eliminate FDI caps, harmonise investment rules with AfCFTA protocols, and reduce tariffs on key inputs used by manufacturers.
It notes that lowering such barriers could unlock significant productivity and employment gains, especially in export-oriented industries.
“The global competition for capital is intense. Kenya risks missing out unless it modernises and simplifies its investment framework,” the report concludes.
