Address the role of counties in Infrastructure Fund law, MPs told

The Katiba Institute has urged Parliament to resolve significant constitutional gaps within the National Infrastructure Fund Bill, 2026.

Appearing before the National Assembly’s Departmental Committee on Finance and National Planning, the institute highlighted critical provisions that require rectification prior to the fund’s establishment.

Represented by Henry Gichana and Beth Odek, the agency raised concerns on the management of the yet to be created fund.

“The Bill is a commendable step in ensuring that public funds are established under the Authority of an Act of Parliament as is required under Article 206(1)(a) of the Constitution,” Gichana told the committee chaired by Molo MP Kuria Kimani.

“However, the Bill raises constitutional and rule of law concerns in the manner in which it is set to be enacted, in its substance and in the manner it is intended to be managed.”

The team was giving their take on the proposed law, which is undergoing stakeholders’ engagement.

The Katiba Institute identified several areas where the proposed legislation may conflict with the devolved structure of governance.

“The scope of infrastructure projects intended for implementation under the Act extends into functions constitutionally reserved for county governments”, the agency said.

“Despite the Bill impacting finances available to counties, it is currently classified as a Bill not concerning county governments. This classification bypasses the Senate's essential role in the legislative process.”

It further said that the Bill’s provisions on public debt have a direct ripple effect on the national revenue pool.

“The clause states that one of the purposes of the fund is to reduce reliance on public debt for financing commercially viable infrastructure investments,” Gichana said.  

“While this objective is commendable, all matters relating to public debt have implications for both national and county governments, as they directly affect the revenue available for sharing under Article 202 of the Constitution.”

To align the Bill with the constitution, Katiba Institute proposed two primary paths: reclassification to formally designate the Bill as one concerning county governments hence seek Senate concurrence, or the reduction of the scope  to remove all references to borrowing and the issuance of government support measures to limit the fiscal impact on devolution.

At the same time, it echoed the sentiments of other stakeholders regarding the limited oversight Parliament would exercise over the fund.

“In addition to this, is a general concern that while the constitutional scheme of national revenue, borrowing and expenditure emphasizes parliamentary pre-authorisation and oversight, not enough measures have been included in the Bill to guarantee closer Parliamentary oversight or expenditure control through institutions such as the Controller of Budget.”

The agency said that rigorous parliamentary scrutiny is vital, noting that the fund is poised to manage hundreds of billions of shillings.

“Without stringent controls, the fund could significantly alter Kenya’s fiscal risk profile outside the standard national budget and expenditure processes,” Katiba Institute said.

The committee also received submissions from Kituo Cha Sheria.

The NGO urged the committee to make provisions that require the Fund to be a statutory public one, operated in line with the Public Finance Management Act.

They also advocated for the amendment of Clause 5(c) to require that any borrowing by the Fund, whether domestic or external, must receive prior approval by Parliament.

To ensure transparency, accountability and fairness in project selection and investment, they proposed the amendment of Clause 12 of the Bill to subject all investments by the board to the provisions of the Public Procurement and Asset Disposal Act.

Kituo cha Sheria further called for inclusion of provisions to expressly require authorisation by the Controller of Budget of all withdrawals by the board and for the fund to be subjected to audit by the Auditor General.

“This will help to uphold constitutional safeguards under Articles 228 and 229 and prevent off-budget expenditure,” it added.