MPs have ring-fenced 30 percent of Kenya’s planned sovereign wealth fund (SWF) for future generations, triple the State's earlier proposed 10 percent, even as the country races to establish a national investment vehicle to manage windfalls from petroleum and mineral resources.
The National Assembly Finance and National Planning Committee pushed through the amendments that also shield the savings component of SWF — known as the Future Generations Fund —from any form of advances, credits, and collateralisation by the government.
This savings component will act as an endowment that accumulates income over time and supports national development after mineral and petroleum resources are depleted.
Committee chairperson Kuria Kimani amended the Sovereign Wealth Fund Bill, 2026 to require that 30 percent of the amount to be deposited in the Holding Account at the Central Bank of Kenya shall be transferred to the Future Generation Component.
Major loophole in the Bill
He also convinced the committee of the whole house to approve changes that require the remaining 70 percent of the total deposits into the Sovereign Wealth Fund to be transferred into the Stabilisation Component and the Strategic Infrastructure Investment Component in such proportions as may be prescribed by the National Treasury Cabinet Secretary in consultations with the Board of the Sovereign Wealth Fund at the beginning of each financial year.
The amendment sealed a major loophole in the Bill, which had granted the Treasury Cabinet Secretary exclusive right to determine how proceeds from minerals and petroleum exploitation will be apportioned between the three components of the Fund.
"Any deposits into the Holding Account shall be transferred into the respective components of the Fund in proportions specified by the Cabinet Secretary in consultation with the Board at the beginning of each financial year considering conditions specified under section 5(2)," the original Bill states.
Mr Kimani told MPs during the committee of the whole house that the changes to Clause 8 seek to provide clarity on the total allocations to each component.
Collateral for borrowing
“As currently drafted, the Bill gives the Cabinet Secretary discretion to determine proportions into each of the three components,” Mr Kimani said while moving amendments to the Bill on Thursday, July 2, 2026.
Mr Kimani also amended the Bill by inserting a new section to clause 46 on prohibition of advances, credit and collateralisation of the Stabilisation Component, and the Strategic Component, leaving out the Future Generation Component.
“The Future Generation Component shall not be used to make advances or loans or provide any other form of credit to a government entity or any person, or as collateral for borrowing by a government entity or any person,” a new clause to the Bill states.
“The amendment seeks to clarify prohibitions against using the Future Generations Component as collateral for borrowing by a government entity.”
“We know the country has gotten a new way of borrowing through securitisation. We must make sure the Sovereign Wealth Fund is safeguarded in a way it cannot disappear after it is securitised. We should do the same with a number of funds passed by this House to ensure that a rogue regime does not seize the Future Generation Component," Manyatta MP Gitonga Mukunji said.
