Introduction

The year 2025 was characterised by heightened policy activity in Kenya amid persistent economic strain, accelerating digitalisation, and growing public scrutiny of how regulatory power is exercised. Rather than a clean pivot in direction, the period reflected a complex negotiation between fiscal necessity, constitutional constraints, sectoral realities, and political accountability. Policymaking unfolded in an environment defined by limited fiscal headroom, contested reform priorities, and a citizenry increasingly willing to interrogate not just policy outcomes, but the legitimacy of the processes that produced them. As a result, regulation in 2025 was less linear and more iterative, shaped as much by pushback, refinement, and judicial oversight as by executive ambition.

These dynamics played out against a recalibrating relationship between the State, industry, and the public. Public participation and stakeholder engagement gained prominence, not always as consensus-building tools, but often as arenas of negotiation and resistance. Courts continued to assert their role as arbiters of constitutional compliance, frequently mediating the boundaries of regulatory discretion. For regulated entities, the operating environment was marked by uncertainty and adjustment, with policy signals emerging unevenly across institutions and sectors. The emphasis shifted toward managing regulatory risk, anticipating policy direction, and sustaining public trust amid evolving expectations of corporate responsibility.

Kenya’s technology, telecommunications, financial services, and manufacturing sectors sat at the centre of this regulatory tension. Rapid innovation in digital platforms, data-driven services, and financial technologies consistently outpaced existing frameworks, exposing gaps in coordination and enforcement. The financial sector faced ongoing scrutiny over pricing, inclusion, stability, and emerging digital products, while the manufacturing agenda grappled with cost pressures, localisation ambitions, and regional trade considerations. Across these sectors, 2025 revealed the challenge of governing growth in real time, balancing innovation, consumer protection, competitiveness, and constitutional principles without the benefit of settled policy orthodoxy.

This review examines how these forces shaped Kenya’s regulatory landscape over the year, and what they signal for the evolving role of public policy in managing economic transformation and public trust.

Technology & Telecommunications

This year has been a whirlwind in Kenya’s Information, Communications and Technology (ICT) and telecommunications sector, marked by major policy developments and efforts to modernise the legal and policy framework governing the industry. The government focused on emerging technologies and strengthening governance, while revisiting the foundational regulatory framework that has guided the sector for years. These developments offer a snapshot of the most impactful changes shaping Kenya’s ICT sector this year.

Perhaps the most consequential development has been the introduction of the  Kenya Information and Communications Act (KICA) Regulations, 2025, which are currently under public participation. These regulations, including the Fair Competition and Equal Treatment Regulations, have reignited tensions between the Communications Authority of Kenya (CA) and the Competition Authority of Kenya (CAK) over who should oversee competition in the sector. While the rules grant the CA greater authority in competition matters, consultation with the CAK is optional rather than mandatory, raising concerns about effective regulatory coordination.

Kenya also made significant strides in emerging technologies. The National AI Strategy 2025–2030  was launched, built on three pillars: digital infrastructure, a robust data ecosystem, and AI research and innovation. Meanwhile, the Virtual Assets Providers Act, 2025, created a licensing and regulatory framework for virtual asset service providers, addressing previous gaps in anti-money laundering and counter-terrorism financing oversight and marking a major policy shift from the Central Bank’s earlier stance on cryptocurrencies.

In data protection and cybersecurity, the sector saw landmark developments. The High Court’s Worldcoin decision prompted the formulation of the Draft Data Protection (Amendment) Bill, 2025,  which aims to strengthen the Office of the Data Protection Commissioner (ODPC)’s independence, broaden data subject rights, and align Kenya’s legal framework with global standards. This was followed by the publication of  The 2025–2029 Cybersecurity Strategy and the enactment of the Computer Misuse and Cybercrime (Amendment) Act, 2024, which expanded the scope of cybercrime offences and enhanced the powers of the National Computer and Cybercrime Coordination Committee (NC4). The amendments have generated significant controversy and are currently under review at the High Court on human rights and constitutional grounds.

Financial Services

In 2025, Kenya’s financial services sector navigated a policy and regulatory landscape marked by ongoing monetary recalibration, incremental regulatory reforms, and efforts to strengthen market transparency and inclusion. Amid subdued private sector credit growth, fiscal pressures, and evolving fintech dynamics, regulators and lawmakers focused on balancing economic support with financial stability. The year was less about sweeping transformation and more about detailed calibration of existing frameworks and responses to persistent sectoral challenges.

At the heart of policy direction was the Monetary Policy Committee (MPC) of the Central Bank of Kenya (CBK). Throughout the year, the MPC continued its easing cycle, lowering the Central Bank Rate (CBR) multiple times to stimulate credit flow and economic activity. By October 2025, the CBR had been trimmed to 9.25%, marking one of several consecutive reductions as the CBK sought to make borrowing cheaper while inflation remained within the target band. The MPC’s decisions reflected a delicate balancing act: supporting growth while guarding against undue risk in the financial system.

Despite sustained rate cuts, private-sector credit growth remained sluggish, prompting greater regulatory emphasis on transmission efficiency. Banks were under pressure to pass rate reductions to borrowers, a priority underscored by CBK warnings of sanctions for non-compliance, and lenders responded by lowering their own lending rates, albeit unevenly. In response to long-standing issues around transmission and transparency, 2025 saw the advancement of a revised Risk-Based Credit Pricing Model (RBCPM). This framework, requiring banks to adopt a base reference rate tied to the new Kenya Shilling Overnight Interbank Average (KESONIA), aims to make loan pricing more transparent and responsive to monetary policy signals.

Regulatory strategy also extended to sectoral licensing and market-entry rules. In a notable shift, the CBK lifted a decade-long bank licensing freeze, ending the moratorium and raising the minimum capital requirement for new banks to KES 10 billion, a tenfold increase intended to ensure resilience while opening the door for fresh entrants.

On the legislative front, Kenya passed the Virtual Asset Service Providers Act, 2025, establishing the country’s first comprehensive legal regime for licensing and regulating digital asset services, including exchanges and wallet providers. While detailed regulations and licensing under this Act are still pending publication, its enactment marked a significant step toward aligning Kenya’s framework with global financial governance standards and combating risks associated with virtual assets. 

In capital markets and across broader sectors, companies such as KCB Group, Co-operative Bank, and I&M Group delivered dividend payouts. They maintained active engagement with investors, indicating resilient corporate performance amid broader economic uncertainties. Similarly, entities opened themselves to new models of equity, including the issuance of Medium-Term Notes, as EABL and Safaricom led on this front. The Capital Markets regime was further strengthened by two high-level transactions: the GOK divestiture in Safaricom and Diageo’s sale of its stake in EABL.

Overall, 2025 reinforced regulatory responsiveness, a cautious monetary posture, and evolving frameworks to support financial inclusion and stability. The trajectory set this year, focused on transparency, compliance, and measured reform, is likely to shape Kenya’s financial services environment into 2026, with continued emphasis on credit access, risk management, and integrated digital finance governance.

Manufacturing

In 2025, Kenya’s manufacturing sector operated within a policy environment defined by fiscal consolidation, incremental regulatory tightening, and a renewed assertion of industrial ambition. The year did not deliver sweeping industrial reform. Instead, policy direction reflected careful recalibration of taxation, standards enforcement, and investment signalling as the government sought to balance revenue mobilisation with the long-stated goal of strengthening domestic production and value addition.

At the centre of the policy landscape was fiscal reform under the Finance Bill 2025. Manufacturing activity showed gradual improvement, with output growth and modest gains in employment suggesting recovery momentum. However, these gains coincided with a shift away from historically generous industrial tax incentives. The Finance Bill proposed the repeal of key investment allowances that had supported large-scale capital expenditure, particularly for manufacturers operating outside core urban centres and within special economic zones. This marked a clear policy turn from incentive-led industrial expansion toward a broader tax base and more uniform treatment of capital investments.

VAT policy adjustments further reshaped the operating environment. Several manufacturing inputs previously zero-rated were reclassified as exempt, limiting manufacturers’ ability to claim input tax refunds and increasing effective production costs. The reintroduction of VAT on locally assembled passenger vehicles added pressure on the automotive assembly segment. In contrast, changes to VAT refund timelines and restrictions on tax loss carryforwards reduced cash-flow flexibility for capital-intensive firms with long project cycles. Expanded excise duties and withholding tax provisions affecting packaging, recycling, and selected intermediate goods compounded cost pressures across supply chains.

Alongside fiscal changes, 2025 saw a marked strengthening of regulatory oversight through standards and compliance enforcement. The Kenya Bureau of Standards implemented a new Standards Levy Order requiring most manufacturers to remit a monthly levy based on turnover, subject to an annual cap that was significantly raised for larger firms. At the same time, small manufacturers benefited from a minimum-threshold exemption; medium and large producers faced higher, more predictable compliance costs. The levy expanded the financial role of standards enforcement within the industrial ecosystem and reinforced the government’s emphasis on product quality, consumer protection, and regulatory discipline. Industry engagement throughout the year focused on implementation clarity, classification disputes, and the cumulative cost of regulatory charges.

These firm-level pressures unfolded against a broader national policy narrative that reaffirmed manufacturing as central to Kenya’s long-term economic transformation. The 2025 State of the Nation address framed industrialisation as a pillar of a wider ambition to reposition Kenya as a competitive producer and exporter rather than a consumption-driven economy. Manufacturing policy was explicitly linked to investments in energy capacity, transport infrastructure, innovation, and regional market integration. While concrete new incentives were limited, the signalling effect was apparent. Industrial growth was expected to come from productivity gains, infrastructure reliability, and private-sector scale rather than from fiscal concessions alone.

Macro fiscal strategy also shaped the manufacturing outlook. Government efforts to stabilise public finances and manage debt influenced the pace and structure of public investment in industrial enablers such as power, logistics, and industrial parks. A strategic approach to asset management and capital mobilisation was positioned to unlock resources for priority sectors, including manufacturing, without expanding fiscal risk. For manufacturers, this reinforced the importance of policy predictability, investor confidence, and alignment between fiscal discipline and industrial development goals.

Overall, 2025 was a year of adjustment rather than acceleration for Kenya’s manufacturing sector. Policy emphasis shifted toward revenue certainty, regulatory compliance, and enforcement of standards, while national leadership reiterated its long-term industrial ambition. The resulting environment demanded greater efficiency, stronger balance sheets, and strategic positioning from manufacturers. How effectively fiscal discipline can be reconciled with competitiveness and industrial deepening remains a defining question as the sector looks toward 2026.

Conclusion

As 2025 draws to a close, Kenya’s policy environment presents a mix of cautious progress and unresolved tensions. Across technology, telecommunications, financial services, and manufacturing, regulatory activity reflected a persistent negotiation between economic imperatives, public scrutiny, and institutional capacity. While frameworks were updated and new laws enacted, implementation gaps and uneven enforcement highlighted the limits of policy ambition amid complex, real-world dynamics. The year underscored that innovation often outpaces regulation, that public participation remains uneven, and that judicial oversight continues to play a decisive corrective role.

For businesses and citizens alike, navigating this landscape required vigilance, adaptability, and proactive engagement. Looking forward, the challenge for policymakers will be to move beyond reactive calibration to craft frameworks that are coherent, anticipatory, and credible while maintaining trust and legitimacy. 2025 leaves a clear signal: in Kenya, effective governance is not only about rules, but about influence, accountability, and the capacity to manage competing interests in real time.