By Benadeta Mwaura - Reporter
Kenya, June 18, 2026 - The national government has expressed concern over the slow pace at which counties are attracting and retaining private investment, warning that bureaucratic bottlenecks, multiple taxation and inconsistent regulations continue to undermine the economic potential of devolution.
The concerns come amid renewed efforts by the government and private sector stakeholders to position counties as engines of economic growth, job creation and industrialisation.
Speaking during a Senate Liaison Committee roundtable with the Kenya Private Sector Alliance (KEPSA) in Naivasha, Senate Deputy Speaker and committee chairperson Kathuri Murungi said investors continue to face numerous hurdles when seeking to establish businesses at the county level.
“Too many investors still face unpredictable licensing regimes, multiple levies, fragmented regulations, delayed payments and bureaucratic bottlenecks,” Murungi said.
He noted that while devolution has expanded economic opportunities across the country, many county governments have yet to create an enabling environment capable of attracting sustainable private sector investment.
According to Murungi, administrative inefficiencies and weak implementation of existing laws are discouraging investment and undermining efforts to stimulate local economic development.
“The gap between good policy and effective execution is what this roundtable seeks to close,” he said.
“We must fix the red tape that is choking our counties if we are to unlock their full potential as hubs of agribusiness, manufacturing, digital innovation, tourism and trade.”
The concerns mirror findings by the Ministry of Investments, Trade and Industry, which earlier this year launched the County Competitiveness Index, a data-driven framework designed to assess the investment readiness of Kenya's 47 counties and guide policy reforms.
Despite significant public investments in infrastructure and industrialisation initiatives under devolution, investor uptake remains uneven across counties.
The national government has invested heavily in initiatives such as County Aggregation and Industrial Parks (CAIPs), which aim to promote manufacturing, value addition and local enterprise development. To date, the government has committed billions of shillings towards the programme in partnership with county governments.
More from Kenya
However, private sector players say inconsistent licensing procedures, overlapping taxes and delays in service delivery continue to erode investor confidence.
Murungi pointed out that the enactment of the County Licensing (Uniform Procedures) Act, 2024 was intended to harmonise licensing frameworks and reduce the cost of doing business across counties, but implementation remains uneven.
Beyond licensing challenges, stakeholders identified inadequate infrastructure, high production costs, weak logistics systems, unreliable utility services and fragmented markets as additional barriers limiting county competitiveness.
The roundtable also highlighted the need for stronger collaboration between the national and county governments to eliminate duplication of roles and streamline regulations affecting businesses.
“These are not abstract issues. They directly affect jobs, livelihoods and the ease of doing business across our 47 counties,” Murungi said.
Kenya is seeking to increase private investment as it pursues its Bottom-Up Economic Transformation Agenda and targets higher economic growth through manufacturing, agriculture, technology and value addition.
According to official figures, the country secured investment commitments worth $2.9 billion from 20 investors earlier this year, with the projects expected to create approximately 63,000 jobs.
Industry leaders argue that for counties to capture a larger share of future investments, they must simplify regulations, improve service delivery, strengthen institutional capacity and create predictable business environments that encourage long-term investment.