Questions abound over state’s plan to set up firm to manage Infrastructure Fund

President William Ruto chairs a Cabinet meeting at State House, Nairobi /PCS

The government has been asked to come clear on the cabinet’s resolution to set up a limited liability company to manage the Sh5 trillion wealth fund.

Opposition leaders, accountability and governance experts and members of the public who spoke to the Star are wondering if the state wants a private entity to manage its fund, or the Monday announcement means setting up a new parastatal.

On Monday, a State House dispatch indicated that the government would establish a new limited liability company to manage the fund billed as President William Ruto’s legacy agenda to transform Kenya into a developed country.

“National Infrastructure Fund will act as the central vehicle for aligning public financial resources with national development priorities, while operating under a corporate structure aimed at improving governance, transparency and investment discipline,’’ the dispatch read.

“Under the new framework, all privatisation proceeds will be ring-fenced and invested strictly in public infrastructure projects that generate and preserve long-term value,” the Cabinet said.

According to the State House, every shilling invested through the Fund is expected to crowd in up to Sh10 from long-term investors, including pension funds, sovereign partners, private equity funds and development finance institutions.

“This is a good dream.  Although it is in its formative stages, several aspects are not clear, especially regarding accountability. What will be the structure of the new company to be formed to manage the fund? This question must be addressed in detail,’’ governance expert James Kuria told the Star.

“We don’t want to see another looting establishment formed before our eyes. Everything must be clear from the word go. Will it be a parastatal under the National Treasury?”

Former Budget Committee chairperson and Kiharu MP Ndindi Nyoro laughed at the plan to set up a company, terming the cabinet resolution as another ‘rubberstamped project’ from the State House.

“Who will be the directors of the new company to be formed? Who will select them? There is everything wrong with these hasty ideas.’’ 

The vocal MP opposes the government’s plan to establish the National Infrastructure Fund (NIF), accusing President William Ruto’s administration of failing to account for nearly Sh4 trillion borrowed since 2022.

He insists that before introducing another mega fund, the government must first explain to Kenyans how the borrowed money has been spent and how the proposed fund will be overseen.

Legal expert Oloo Kuria, who says that by now, there is no standalone Act of Parliament that formally establishes the Infrastructure Fund as a statutory fund, thus making it null and void, echoes his views.

“I fear that this will serve as a tool to look at Kenya’s resources.”

David Ndayara on X observes that the government wants to keep the fund off the law as much as possible so that it is controlled off the books. “We cannot trust billions of public funds with politicians or state officers without checks.”

Wiper Party leader Kalonzo Musyoka has criticized the establishment of the “alternative financing mechanisms”, saying that they contradicted constitutional principles, which emphasize transparency, parliamentary oversight, and equitable distribution of fiscal responsibilities across generations.

“Ruto’s push for 'alternative financing mechanisms' flies in the face of a Constitution that deliberately anchors public finance in transparency, parliamentary oversight, and the fair distribution of burdens across generations,’’ he said.  

National Treasury boss, John Mbadi, says that the government is working on the modalities of setting up the Infrastructure Fund without having to precede the same with a Bill. 

According to him, the plan is for proceeds of privatisation to be split between the Sovereign Wealth Fund & the National Infrastructure Fund in a 90:10 or 80:20 ratio starting 2026.

Apart from the Infrastructure Fund, the cabinet endorsed a Sovereign Wealth Fund Policy that sets out a comprehensive framework for the prudent management and investment of revenues from mineral and petroleum resources, dividends from public investments and a portion of privatisation proceeds through a dedicated national fund.

“Anchored on inter-generational savings, protection against external shocks and strategic investments with commercial returns, the Sovereign Wealth Fund will strengthen fiscal discipline, enhance resilience and support long-term national competitiveness,” the Cabinet said.

The framework is also intended to operationalise Article 201 of the Constitution on inter-generational equity and advance the Kenya Kwanza administration’s investment-led growth agenda.