Manufacturing is the largest part of Kenya's industrial sector and contributed an estimated 13.2% to the country's GDP in 2000 and employs 8 per cent of the labour force. The major industrial centers in Kenya are found in the urban areas of Mombasa and Nairobi. The sector faces a number of difficulties, notably a weak infrastructure, rising costs and import competition. The primary manufacturing industries are small-scale consumer goods (plastic, furniture, batteries, textiles, soap, cigarettes, and flour), agricultural processing, oil refining, and cement. There are limited meat processing and dairy industries as well as leather, paper, textile, and sugar production. Petroleum products are manufactured at government-owned refineries on the coast. Kenya relies on imported crude for its jet fuel and diesel. Imported raw materials are also used in the manufacture of machinery and motor vehicles.

During the 1990s the government's industrial policy shifted away from import substitution and protectionism towards liberalization and privatization. In practice, this has led to the gradual removal of tariff barriers, encouraging competition and recognizing the role of the informal Jua Kali industrial sector. The public sector plays a relatively minor role in industry in Kenya.

The Eighth National Development Plan (1997-2001) aims to increase growth, investment and employment prospects in order to achieve a greater industrialized status. However, international backing was frozen in mid-1997 due to non-implementation and political concerns. Exploratory oil wells in the Rift Valley and northeastern provinces have produced positive results. Kenya has a 4.2 million tones capacity oil refinery at Mombassa, which is a major foreign exchange earner.