Duale pushes for pension assets to fund infrastructure projects

Health Cabinet Secretary Aden Duale/FILE

Health Cabinet Secretary Aden Duale has highlighted the potential of Kenya’s pension and collective funds to finance infrastructure and drive economic growth.

Speaking on his X account on Monday after President William Ruto signed the Sh5 trillion Infrastructure Development Fund bill into law, Duale said Kenya’s domestic capital, including Sh2.81 trillion in pension funds, represents the patient capital that can support national development while securing the future of pensioners.

He said the funds could be directed to create jobs for the children of pension contributors, ensuring that the resources work both for retirees and the country.

“With pension assets growing by Sh700 billion in 2023 alone, traditional investments in Treasury bills or bonds are insufficient,” Duale said, adding that the new asset classes and investment avenues are needed to channel these funds effectively to drive economic growth, expand opportunities and maximise the impact of Kenya's domestic capital.

The CS pointed to the broader context of African capital, stressing that the continent’s challenge is not a lack of capital but how it is organised.

He said with over $30 billion in domestic savings in Kenya, there is a significant opportunity to finance infrastructure projects that create jobs and support long-term development.

The newly established National Infrastructure Fund, he explained, provides a framework to realise this potential.

“An initial capitalisation of Sh106 billion from the Kenya Pipeline Company will anchor the National Infrastructure Fund, with the objective of leveraging this capital up to twelve times to mobilise nearly Sh1.2 trillion for infrastructure investment,” Duale said.

Over the next decade, the fund could unlock close to Sh5 trillion in infrastructure financing, providing sustainable support for roads, railways, power systems, housing, and irrigation projects.

Duale said the fund fulfills a long-standing commitment to gradually reduce reliance on the national budget for commercially viable projects.

“What once appeared as an ambitious proposal has now taken concrete shape, laying the foundation for a new model of financing Kenya's infrastructure development,” he said.

He also underlined the need for strong governance, project planning, and risk management to ensure investments are reliable and impactful.

“Expanding the economy benefits everyone, businesses, government and citizens while creating a foundation for future generations,” Duale said, adding that leadership remains committed to ensuring that Kenya realises its potential and delivers progress across the country.