Ruto plans Sh25.99bn Green Fund, single-digit loans for manufacturers

President William Ruto announced during the Kenya Industrialisation Summit that the Kenyan government is in the final stages of establishing an Industrialisation Fund, aimed at providing manufacturers with loans at single-digit interest rates to promote local production and attract investment. The proposed fund will initially offer financing ranging from Sh5 million to Sh20 million, with plans to progressively increase lending capacity to Sh100 million and Sh200 million.

Speaking at the summit, Ruto highlighted the initiative as a solution to financing issues faced by enterprises seeking to establish or expand manufacturing operations. However, he did not disclose the fund's initial capitalization, funding sources, implementation timeline, or the criteria for loan qualification. Additionally, the President unveiled plans for a Green Investment Fund targeting $200 million (Sh25.99 billion) in capitalization, though details on its financing structure and operational framework remain undisclosed.

This move comes as Kenya strives to expand manufacturing's contribution to the economy, create jobs, and decrease reliance on imported goods. According to the Kenya National Bureau of Statistics' Economic Survey 2026, manufacturing contributed 7.1 percent to the country's GDP in 2025, down from 7.3 percent in 2024, which underscores the challenges in achieving the government's goal of raising the sector's contribution to 20 percent by 2030.

Manufacturing output grew by only 2 percent to Sh3.8 trillion during the year, highlighting the obstacles to growth due to high operating costs, competition from imported products, limited access to capital, infrastructure gaps, unreliable and expensive electricity, and regulatory challenges. The World Bank has previously identified these as key constraints to Kenya's manufacturing competitiveness.