The government has called out manufacturers over complaints of an unfavourable business environment, citing a surge in foreign enterprises setting up regional hubs in the country.
Principal Secretary State Department of Industry Dr Juma Mukhwana said the sector has been punching below its weight.
"If you look at the infrastructure we have built for industries and the efforts made to integrate them (industries) into regional markets, they have been punching below their weight," said Dr Mukhwana.
He said the government's role is to referee the sector and to listen to suggestions on how to improve it.
"We want Kenyan industries to cross the borders to the Democratic Republic of Congo, and sell to Burundi and South Sudan. We want you, for lack of a better word, to stop being crybabies," said Dr Mukhwana.
He added: "The world is moving, and we can't keep on complaining. We are here to listen, but we also want you to run."
The PS said more companies from Europe, China and the United States have expressed interest in making Kenya their launching pad for the rest of Africa.
"And as manufacturers who are already established in this space, if we are going to sit and cry, we will be overtaken. I think we need to be ahead of the game. Challenges notwithstanding, we must start looking at Africa as our market," he said.
"The stampede that we are seeing is because they see Kenya as their launching pad. You have a lot of experience in manufacturing, and it is a lot easier for you to move into that space," said Dr Mukhwana.
The PS was addressing the Kenya Association of Manufacturers (KAM) Small and Medium Enterprises (SME) Convention in Nairobi last week.
The meeting sought to address challenges faced by SMEs in the manufacturing sector.
KAM highlighted four pillars of growth for such enterprises - global competitiveness, export-led growth, agriculture for industry and SME development.
The high cost of power, overlapping roles of regulatory bodies and taxes are some of the issues manufacturers cited for inhibiting the growth of their businesses.
KAM Chairman Rajesh Shah said local industries need government support to compete globally.
"Goods find their way across the globe from the more competitive to the less (competitive) countries. This is where we tend to import more from countries that are net exporters because they are competitive," said Mr Shah.
He urged the government to create a conducive regulatory environment to ease the cost of doing business in the country.
Mr Shah said the association will empower members, particularly SMEs to automate to manage their cost of production.
Co-operatives and Micro, Small and Medium Enterprises Cabinet Secretary Simon Chelugui said the sector cannot grow if manufacturers do not focus on export markets.
"People complain about the quality of goods from China, but they are still exporting. The world is looking for better and more competitive prices. Others export pens and toothpicks for Sh260, yet we can make the same toothpicks at a much cheaper price," said the CS.
"The bottom line is those countries are making money. And they are exporting even if they sold us furniture that lasts for a week."
Mr Chelugui emphasised the need for more economic blocs to expand Kenya's market.
"We are only 50 million people, but the larger East Africa has 300 million people," said the CS.
Mr Chelugui urged SMEs to tap growth opportunities by maximising the use of infrastructure put in place by the government, including coolers and industrial parks, among other common user facilities.
The CS noted that there are approximately 7.5 million micro, small and medium enterprises in the country, contributing to approximately 30 per cent of the Gross Domestic Product (GDP).
About 85 per cent of MSMEs are in the informal economy.
