The State will maintain a tight grip on the running of the National Infrastructure Fund (NIF), an arrangement that could discourage private investors wary of the excessive bureaucracy associated with the government.
This is if the National Infrastructure Fund Bill 2026, which was tabled in the National Assembly on January 23, is passed as it is.
Under the proposed law, the Treasury is supposed to play an overarching role in the affairs of the fund, with its Cabinet Secretary being given the responsibility of setting the performance target for the fund.
The Cabinet Secretary, who serves as a member of the nine-member board, will be responsible for performance evaluations, establishing employment frameworks for staff, and issuing remuneration guidelines.
“The Cabinet Secretary shall be responsible for performance evaluation of the fund and for purposes of performance evaluation, may co-opt relevant external experts that may include those from relevant ministries,” reads part of the Bill, which Leader of Majority Kimani Ichung’wah tabled in Parliament.
The Auditor General will also review financial statements for the fund, just like other State-owned entities, raising questions on whether the State has backtracked on its earlier claim that the running of the kitty would be led by private sector players.
The fund, through which the William Ruto administration has set an ambitious target of mobilising Sh5 trillion by crowding-in private capital by leveraging up to Sh10 for every shilling invested. Analysts have, however, warned that the many State fingerprints might scare off investors.
An analyst, who did not want to be named, said the independence of the fund is critical to allow investors to run with the projects without political interference.
“Why would you put 90 percent of the capital if you then have to report to a politician?” wondered the analyst.
The fund’s activities will be guided by a five-year investment plan that will form the basis upon which performance contracts between the fund and the Treasury CS will be signed.
“The Cabinet Secretary shall by means of performance contracts convey to the Fund performance targets for the specified period.”
The performance contracts, which the CS will sign with the Board, are designed to enhance the commercial performance of the Fund to sustain its long-term sustainability, make a fair return and minimize costs and fiscal risks to the national exchequer.
Tabled on January 23, the Bill outlines the governance structure of the kitty whose seed capital will be proceeds from privatization of state entities and disposal of government assets.
President Ruto has said that the money from the Fund will be invested in projects that will help grow the human capital, generate additional energy, and transform transport and logistics.
The government has indicated that proceeds from the ongoing initial public offering (IPO) of Kenya Pipeline Company and partial sale of its stake in Safaricom will form part of the Fund’s seed capital.
The State expects to raise Sh106 billion from the Kenya Pipeline IPO and around Sh244.5 billion from selling a 15 percent stake in Safaricom to the South African firm Vodacom Group.
The Sh244.5 billion includes an upfront dividend of Sh40.2 billion on what will be the government’s residual stake of Sh20 percent in Safaricom.
The board will be responsible for the Fund’s key role of mobilizing resources by developing an investment policy to be approved by the CS for National Treasury.
“The Board shall, prior to the commencement of a financial year, adopt an investment plan based on the national strategic objectives,” reads part of the Bill, noting that the investment plan shall be effective on the first day of the financial year, which shall be July 1.
“The investment plan shall form the basis of annual performance contracts to be signed between the Cabinet Secretary and the Fund,” reads the Bill.
