Introduction

As the world heads into an AI-driven 2026, there are several critical things to watch for, both risks and missed opportunities. 

China is pushing ahead with chip-making after eliminating any serious threats, while the US is repositioning around Venezuelan oil. Europe is still debating what to do with seized Russian assets.  From a geopolitical perspective, all these things point to a world entering hard-nosed geo-economic competition. It will be important to US-China relations as they evolve to be the organising axis for power. The rivalry has shifted from trade to systems. Who sets technological standards (AI, chips, telecoms), who controls energy and critical minerals and whose rules govern finance, data, and security? 

The battle for the control of systems started with China’s deliberate, long-term strategic actions on both chips (semiconductors) and rare earth minerals, coming to light this year after US President Trump imposed heavy US export controls from 2018 onward, China lost access to advanced chips and EUV lithography which saw firms like Huawei temporarily crippled but instead of backing down, China absorbed the shock and doubled down and now controls huge parts of the non-advanced chip market. This year, China retaliated against the US and the world by treating semiconductor chips as national power assets rather than just commercial goods. They have also been investing in rare-earth minerals, which are critical to electric vehicles (EVs), turbines, AI hardware, and consumer electronics. 

In addition to rare-earth minerals, China has been quietly stockpiling silver, which is mined as a byproduct of copper, lead, and Zinc. Silver is also used in the manufacture of electronics and solar panels. The silver shortage in 2025 will be something to watch for in 2026. 

Finally, this year, China, for the first time, issued documents in WPS Office format, the Chinese software suite, signalling its continued bid for Independence from everything US. This is a warning shot that China will continue its bid for independence until it is on par with the US in technological advancement. AI will accelerate this rivalry, signalling that US-China relations are no longer the wallpaper but the operating system. This will affect supply chains and challenge the hegemony in trade across various sectors that the US has so far enjoyed. 

Technology & Telecommunications

As Kenya looks toward 2026, the centre of gravity in digital and ICT policymaking is shifting toward the consumer, cloud adoption, sustainability, and competition regulation. Consumer protection is no longer a peripheral concern but is emerging as a core pillar in regulating the digital economy and responding to rapidly evolving technologies. The stage for 2026 was set in November 2025, when the government formally opened public participation on the draft National Consumer Protection Policy of 2025. Led by the State Department for Trade through the Kenya Consumer Protection Advisory Committee, the process invited stakeholders to shape a policy that will guide the regulation of digital services, online platforms, and technology-enabled markets into the new year.

Closely linked to this policy process is a growing legislative focus on internet service pricing and delivery. Currently at the committee stage, Aldai MP Hon. Marianne Keitany’s proposed amendments to the Kenya Information and Communications Act seek to regulate internet billing by advocating for metered billing based on actual usage, greater transparency in data tracking, and clearer consumption-based invoicing. This approach reframes internet access as a consumer rights issue rather than a purely commercial matter.

This consumer-centred agenda is reinforced by parallel reforms in competition law, notably the Competition (Amendment) Bill, 2024, which strengthens consumer welfare across traditional and digital markets. The Bill expands the Competition Authority’s ability to intervene in cases of systemic consumer harm, including platform-driven markets. He introduces concepts such as a superior bargaining position to address power imbalances below classical dominance thresholds. Still in draft and validation stages, the Bill is expected to be tabled and debated in Parliament in 2026.

Alongside competition reforms, emerging technologies, particularly artificial intelligence (AI), are receiving heightened regulatory attention. Following the launch of the National AI Strategy, debate has intensified over moving from strategy to a formal AI policy and legislative framework. Parliamentary initiatives, including a motion by Aldai MP Hon. Zipporah Kietany calling for an Artificial Intelligence Bill, are expected to crystallise into concrete legislative proposals during the year.

Closely related is the implementation of the National Cloud Policy, which emphasises data classification and localisation of data infrastructure. As 2026 unfolds, the Cloud Implementation Committee will drive policy translation into practice, beginning with national data classification guidelines that will shape how public institutions migrate to cloud-first systems. Compliance timelines will see government entities prioritising cloud solutions in procurement and ICT investments, while accredited cloud service providers come under closer oversight on security standards, data residency, and interoperability.

The year is also set to elevate electronic waste management as a pillar of Kenya’s digital ecosystem. The Electronic Equipment Disposal, Recycling and Reuse Bill, 2025, establishes a legal framework for managing e-waste and addressing environmental and public health risks posed by hazardous materials. The Bill mandates collection at designated sites, county-level sorting, and a national recycling plant, while licensing e-waste collectors and recyclers and enforcing penalties for non-compliance. It promotes safe disposal, recycling, and reuse, supporting a circular economy and sustainable electronics management nationwide.

At the regional level, 2026 will emphasise data harmonisation and governance as Kenya aligns with the East African Community (EAC) and continental frameworks to enable secure and interoperable cross-border data flows. Central to this effort is the National Data Governance Policy, currently being considered by the Ministry of Information, Communication, and Digital Economy in partnership with the EU and Germany through GIZ. The policy seeks to establish a comprehensive framework for responsible and ethical data use across government, the private sector, and civil society.

Financial Services

Looking ahead to 2026, Kenya’s financial services policy environment is poised for deeper structural shifts as regulators and lawmakers build on the groundwork laid in 2025, even as the country navigates the political economy of an election year. A major strategic signal was the Cabinet approval of the National Infrastructure Fund (NIF) and the Sovereign Wealth Fund (SWF); two vehicles envisaged to mobilise long-term capital for priority investments in energy, transport, and industrialisation while reducing reliance on recurrent borrowing. The NIF, established as a limited liability company, aims to crowd in domestic savings and private capital without introducing new taxes. At the same time, the SWF is designed to safeguard intergenerational equity and strengthen economic resilience through the professional management of a diversified asset portfolio.

In the realm of financial markets and banking, 2026 is likely to deepen the implementation of the Risk-Based Credit Pricing Model (RBCPM), anchored to the new Kenya Shilling Overnight Interbank Average (KESONIA), a shift to a transparent, risk-aligned reference rate that replaced older benchmarks in September 2025. This reform is expected to improve monetary policy transmission and make loan pricing more transparent, benefiting households and businesses alike.

Digital finance regulation will come to the fore with the operationalisation of the Virtual Asset Service Providers Act, 2025 (VASP Act), which came into force in November 2025. The Act establishes a comprehensive licensing and supervision regime for virtual asset service providers, with the CBK and the Capital Markets Authority (CMA) mandated to issue detailed Regulations to enable licensing and enforcement in early 2026. Once regulations are gazetted, crypto exchanges, wallet providers, and other digital asset intermediaries will be brought into a formal regulatory fold, advancing investor protection and AML/CFT compliance.

On anti-money‑laundering (AML) and global compliance, Kenya will continue to pursue reforms to address shortcomings identified by the Financial Action Task Force (FATF). Although technical legislative steps have been taken, including tightening AML/CFT laws and extending reporting obligations to new sectors, enforcement effectiveness remains a challenge. Kenya remains on the FATF’s grey list for deficiencies in prosecuting financial crimes and identifying at-risk non-profits and other entities, and 2026 is likely to prioritise stronger enforcement, beneficial ownership transparency, and enhanced cross-border cooperation if the country hopes to exit the grey list.

Election-year dynamics will inevitably shape fiscal and financial policy proposals, including the Finance Bill 2026, amid heightened public engagement and political scrutiny of taxation, financial inclusion, and digital finance. Linked to this is the strategic focus embedded in the National Financial Inclusion Strategy (NFIS 2025–28), which aims to reduce mobile money transaction costs significantly (targeting a >50% reduction by 2028) and promote transparent pricing, interoperability, and quality usage of digital financial services, efforts that will gain legislative and regulatory momentum in 2026.

Finally, long-standing issues such as the management of unclaimed financial assets remain relevant, with policy discussions likely to explore more active deployment of dormant resources to support developmental finance or inclusion objectives. Taken together, the 2026 policy trajectory points to an environment defined by institutional strengthening, strategic financing mechanisms, digital finance regulation, and alignment with global standards, albeit amid the heightened expectations and contestations of an election cycle.

 Manufacturing

Looking ahead to 2026, Kenya’s manufacturing policy environment is expected to shift from fiscal adjustment toward selective structural execution, as the government and regulators build on the recalibrated framework established in 2025 while operating within the political-economic pressures of an election cycle. The emphasis is likely to move from introducing new tax measures to demonstrating delivery on competitiveness, infrastructure efficiency, and industrial coordination, with manufacturing positioned as a test case for the credibility of Kenya’s broader economic ambitions.

A major strategic signal for manufacturers in 2026 will come from the operationalisation of new State-led financing and investment vehicles aimed at long-term capital mobilisation. As national infrastructure and strategic asset platforms take shape, manufacturing is expected to be a priority beneficiary, particularly in energy-intensive, logistics-dependent, and value-added industries. Rather than direct tax incentives, the policy thrust is likely to focus on lowering structural costs through improved power reliability, transport efficiency, and targeted public-private partnerships in industrial zones and value chain hubs.

Fiscal policy in 2026 is forecast to remain constrained, with limited room for broad-based relief for manufacturers. The measures introduced in 2025 are expected to persist, meaning firms will operate within a more stable but less accommodative tax environment. Attention will therefore shift to administration and execution, including VAT refund efficiency, predictability in customs treatment of inputs, and clearer guidance on the application of excise and withholding taxes across manufacturing supply chains. In an election year context, fiscal proposals affecting consumer prices, employment, and domestic production are likely to attract heightened scrutiny, increasing pressure on the government to balance revenue needs with industrial competitiveness.

Regulatory enforcement in manufacturing is expected to deepen in 2026, particularly around standards, quality assurance, and traceability. The standards levy framework introduced earlier will increasingly be treated as a settled feature of the regulatory landscape, with enforcement consistency and audit practices becoming the central concern for industry. Manufacturers with strong compliance systems are likely to benefit from improved market confidence and export readiness, while smaller and informal producers may face rising barriers to entry, accelerating sector consolidation.

From an industrial policy perspective, 2026 is likely to test the shift from incentive-driven manufacturing to productivity-led growth. Government messaging is expected to emphasise scale, efficiency, and regional competitiveness under AfCFTA and East African trade arrangements. Agro-processing, pharmaceuticals, building materials, and manufacturing of essential consumer goods are likely to remain policy priorities due to their employment intensity, import-substitution potential, and political salience. Export-oriented manufacturers are expected to benefit most from this policy direction, particularly those able to meet stricter quality and standards requirements.

Election-year dynamics will shape both the tone and the timing of manufacturing policy decisions. While major disruptive reforms are unlikely, there may be targeted interventions aimed at protecting jobs, stabilising key consumer goods prices, and supporting strategically important industries. At the same time, political contestation could slow implementation of deeper structural reforms, placing greater importance on administrative efficiency rather than legislative change.

Overall, the 2026 outlook for Kenya’s manufacturing sector points to an environment defined by execution rather than experimentation. The success of the year will depend less on new policy announcements and more on whether the government can translate industrial ambition into lower operating costs, predictable regulation, and functional infrastructure. For manufacturers, 2026 is likely to reward efficiency, compliance readiness, and strategic alignment with national value addition priorities, setting the tone for a potentially more expansionary industrial phase beyond the election cycle.