Following independence in 1965, the Singapore government took over or started various businesses to ensure economic survival and job creation. But by 1974, the Minister for Finance realised he had a problem that had quietly become embarrassing. His ministry was the legal owner of 35 companies. Not a metaphor or hyperbole. There were 35 actual companies that included a bird park, a hotel, a shoemaker, a detergent producer, naval yards, a startup airline, and an iron and steel mill.
The government had accumulated this eclectic portfolio of companies in the decade after independence. Each acquisition made sense at the time. None of it made sense together. The Ministry was trying to make monetary policy and manage a shoemaker simultaneously. It became untenable.
So the government made an uncomfortable decision. And on June 25, 1974, Temasek Holdings was incorporated under the Companies Act as a private limited company, not as a government agency, not as a statutory board, but as a commercial entity governed by a board of directors, subject to the Companies Act, paying taxes like any other firm. The 35 companies were transferred to Temasek at a book value of S$354 million (US$150 million, Sh19.4 billion).
The Ministry of Finance went back to making policy. Temasek went to work managing investments. Today, Temasek's portfolio is worth over S$389 billion (US$307 billion, Sh39.6 trillion). It has maintained a AAA credit rating from both S&P and Moody's for over two decades. And Singapore Airlines, DBS Bank, and Singtel, all in that original eclectic portfolio, are today among the most commercially competitive firms in Asia.
The lesson Singapore drew was precise. When a government tries to be both the referee and a player on the same field, it fails at both. The corporate structure was not ideological. It was a pragmatic answer to a specific institutional problem.
Let’s bring this home. Today, Kenya is staring at an infrastructure financing inflection point where what the economy requires and what government budgets can fund, even in its most optimistic configuration, can cover only a fraction of. The rest must come from institutional capital such as corporate bonds and development finance institutions.
These are not romantic donors or sponyos. They are rational commercial actors. They will not enter a 20-year infrastructure partnership with a line ministry. Not because they distrust Kenya. But because ministries operate on annual budget appropriations that lapse at the end of every financial year. They therefore cannot make the kind of long-horizon, bankable financial commitments that commercial co-investors require, cannot independently issue a bond, and cannot carry a self-standing balance sheet liability outside the Consolidated Fund.
The Singapore Ministry of Finance could not run Temasek. A Kenyan line ministry cannot run the Kenya National Infrastructure Fund (KNIF).
In economic-speak, this is the institutional gap between public investment demand and private capital supply. The corporate structure is the bridge. It is the same bridge Singapore built, that India used to establish the National Investment and Infrastructure Fund, that Abu Dhabi used to structure Mubadala and that Saudi Arabia used to rebuild its Public Investment Fund. The pattern is not coincidence. It is 50 years of accumulated institutional evidence.
Begs the question. If the structure works everywhere else, why not here?
I’ll tell you why. Because we have been here before and our institutional memory is long and unflattering. We have watched parastatals captured and converted into patronage rosters wearing corporate titles. We have watched special-purpose vehicles serve purposes entirely unrelated to their stated mandates. We have watched regulatory agencies become agents of the industries they were created to police. So the sceptics and critics are pointing at a real and documented cautionary tale. Not a hypothetical.
But here is where the argument must be precise on the current conversation about KNIF. Why is it corporate? Why will it be privately incorporated? What is being hidden? These are legitimate questions. They are not obstructionist. They are, in fact, the only questions worth asking. The mistake is in thinking that the answer to those questions is to abandon the idea in its entirety. It is not.
The answer is to build the governance inside that structure with the same deliberateness that Temasek did. Abandoning the idea rather than demanding the governance will return to the same ministry-based model that has delivered decades of infrastructure promises written on budget paper.
Why corporate at all? Because infrastructure finance is not a typical public administration function. It is a specialised craft: project preparation, risk allocation, financial modelling, credit enhancement, bond issuance, blended finance structures and contract management over decades. Government agencies, even well-run ones, struggle to compete for that talent under public salary constraints, and struggle to move at the speed required to close transactions before markets shift or sponsors lose confidence.
What must be true for KNIF to work is not mysterious. Singapore showed us. KNIF is the appropriate response. It offers Kenya a way to do three things simultaneously: mobilise large-scale capital without forcing everything through the Exchequer bottleneck, ring-fence infrastructure investment decisions from short-term political cycles, and build an institutional platform that can speak the language of lenders, the people who have the long-term money.
However, there should be a minimum of five non-negotiable conditions. The board and CEO must be constituted and appointed strictly on legislated competence especially proven expertise in infrastructure finance and investment management, rather than patronage; the investment mandate must be hardwired into the founding law, clearly spelling out eligible sectors and prohibited investments, with changes only possible through Parliament because vagueness is an invitation to abuse; accountability must be built in through annual audited accounts prepared to international standards and published every year, since transparency is not the enemy of commercial credibility but its foundation; conflict-of-interest provisions must carry criminal, not merely administrative, consequences so that misconduct is not treated as a manageable inconvenience; and all contingent liabilities must be consolidated and reported to the National Treasury, because invisible debt is the original sin of infrastructure finance. It accumulates quietly and arrives all at once.
Finally, my unsolicited advice is twofold: first, to everyone asking why KNIF is corporate. That is the right question. Singapore asked it in 1974 and answered it with 50 years of compounding returns. Kenya does not have 50 years. Our need is immediate and urgent. Opposing it is not purity. It is paralysis. Because our infrastructure gap is not about prestige. It's about productivity, jobs and the cost of living. A country that cannot move people and goods quickly and cheaply, power factories reliably, connect citizens digitally, or deliver water and sanitation at scale is condemned to expensive slow growth.
The answer is not in KNIF’s structure. It is in the discipline you build around it. Demand the legislated mandate. Demand the independent board and management. Demand the published accounts. Because the real question Kenya is asking is not whether KNIF should be incorporated. It is whether Kenya has the institutional resolve to govern it the way Singapore governed Temasek. That resolve cannot be retrofitted after the first appointment is made. It must be designed in from the start.
Secondly, to the government. Do not dismiss public suspicion as cynicism. Convert it into design strength. Build transparency into the structure so robustly that the “what is being hidden?” question becomes NOTAM. In Kenya, legitimacy is not announced; it is engineered deliberately.
The greatest enemy of knowledge is not ignorance. It is the illusion of knowledge. —Stephen Hawking
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