Kenya Faces Questions Over Oversight of New $5 Trillion Infrastructure Fund

On March 9, 2026, President William Ruto signed the National Infrastructure Fund (NIF) Bill into law at State House, Nairobi, flanked by National Assembly Speaker Moses Wetang'ula, Treasury Cabinet Secretary John Mbadi, and a room full of private sector executives and foreign investors [1]. The new legislation establishes what the government calls a "paradigm shift" — a KSh 5 trillion ($39 billion) vehicle to finance highways, railways, ports, airports, agribusiness infrastructure, and energy systems over the next decade [2].

But beneath the ceremony and the bold promises lies a fierce and unresolved debate: Is this fund a genuine engine for national development, or a mechanism that could move trillions of shillings beyond the reach of constitutional safeguards designed to protect Kenyan taxpayers?

The Architecture of the Fund

The National Infrastructure Fund is structured as a limited liability company — a deliberate design choice meant to insulate it from bureaucratic inertia and give it the flexibility to attract private capital [3]. The government claims every shilling of public money invested through the NIF could crowd in up to KSh 10 from pension funds, private equity, development finance institutions, and sovereign wealth partners — an ambitious 10-to-1 leverage ratio [4].

The fund's seed capital comes from two major asset sales. First, the Initial Public Offering of Kenya Pipeline Company (KPC), in which the government sold a 65% stake in East Africa's largest pipeline operator, raising KSh 106.3 billion ($825 million) in an oversubscribed offering [5]. Second, the sale of 15% of the government's stake in Safaricom PLC — Kenya's most valuable company and the operator of M-Pesa — to Vodacom Group, expected to generate approximately KSh 244.5 billion ($1.9 billion) including upfront dividend rights [6].

The governance structure established under the law includes a Governing Council chaired by the Treasury Cabinet Secretary, with the Central Bank Governor, the Attorney-General, and six independent members appointed by the President for three-year terms. A board of directors — including four independently-recruited professionals with minimum ten years' experience in finance, engineering, or law — oversees day-to-day operations [1].

The first flagship project: a complete modernization and expansion of Jomo Kenyatta International Airport (JKIA), followed by the Naivasha-Narok-Bomet-Nyamira-Kisumu-Malaba standard gauge railway extension, and the Galana-Kulalu irrigation dam [7].

The Auditor General's Red Flags

Before the Bill reached the President's desk, the Office of the Auditor-General (OAG) issued a withering assessment, flagging what it described as "wide-ranging legal, governance and constitutional gaps" that could "weaken oversight of public resources" [8].

The concerns were specific and technical:

• Clause 5 empowers the Fund to borrow without explicit alignment to Article 206 of the Constitution and the Public Finance Management Act, creating potential "loopholes in debt oversight" [8].
• Clause 12 grants the Board authority to invest through equity and debt and to dispose of assets without safeguards such as competitive bidding or public auction, as required under the Public Procurement and Asset Disposal Act [9].
• Clause 13 vests directors' remuneration in the Treasury Cabinet Secretary without reference to the Salaries and Remuneration Commission, the constitutional body mandated to set public sector pay [8].
• Clause 33 appears to bypass the Controller of Budget's constitutional mandate to authorize withdrawals, raising what the OAG described as the "prospect of public funds moving outside established legal guardrails" [9].

Perhaps most damning was the structural contradiction at the heart of the legislation: while the NIF's stated objective is to reduce reliance on public debt, several clauses prioritize debt as a primary financing strategy — raising the possibility that borrowing simply migrates into a new vehicle even as it is "rhetorically displaced" [10].

The Constitutional Showdown

The legal challenges have extended beyond expert opinion into active litigation. In December 2025, the High Court temporarily blocked the establishment of the NIF following a constitutional petition. Justice Bahati Mwamuye granted a conservatory order stopping the government from proceeding, after petitioners argued that registering the fund as a Limited Liability Company would place trillions of shillings "outside parliamentary oversight and beyond the routine audit mandate of the Auditor-General," creating what they termed a "shadow treasury" [11].

The block was lifted on March 6, 2026, after the National Assembly passed the Bill — effectively rendering moot the injunction against an executive-created entity. President Ruto signed it into law three days later [12]. However, the underlying constitutional petition remains active, meaning the courts could still rule portions of the Act unconstitutional [13].

Opposition politicians under the United Alternative Government banner had urged Parliament to reject the Bill outright, calling it a vehicle for executive overreach [14].

The Singapore Comparison — And Why Critics Say It Doesn't Fit

The government has explicitly benchmarked the NIF on Singapore's Temasek Holdings, Australia's Future Fund, and the UAE's Mubadala Investment Company — state-owned vehicles that have generated substantial returns while financing national development [15].

The comparison is flattering but, critics argue, deeply misleading. Writing in The Elephant, policy analyst Janet Jebichii Sego argued that the NIF is essentially a "Singapore cut-and-paste job" that ignores fundamental differences in institutional context [15]. Under the Government-Owned Enterprises (GOE) Act, the Cabinet Secretary for the National Treasury holds substantial power over appointments: nominating the fund's independent directors from a shortlist prepared by a panel that is itself appointed by the same Cabinet Secretary. This circular appointment structure, Sego warned, leaves the fund's management "vulnerable to political interference" [15].

The gap between Kenya and Singapore in governance capacity is not abstract. On Transparency International's 2024 Corruption Perceptions Index, Kenya scored 30 out of 100, ranking 130th out of 182 countries surveyed. Singapore scored 84, ranking third globally [16]. The distance between the two countries' institutional environments is vast, and transplanting a governance model from one to the other without accounting for that gap is, as Sego wrote, an exercise in "avoiding the core problems [the government] should address" [15].

Source: World Bank Open Data

Data as of Feb 24, 2026CSV

Kenya's Debt Burden: Context for the Shift

The NIF does not exist in a vacuum. Kenya's public debt stood at 67.8% of GDP as of June 2025 — 17.8 percentage points above the IMF's recommended threshold of 50% for developing countries [17]. External debt reached KSh 5.49 trillion, with $14.4 billion owed to the World Bank, $7.5 billion to Eurobond investors, and nearly $5 billion to China — much of it tied to previous infrastructure projects, most notably the $5.3 billion Standard Gauge Railway [18].

The government's pitch for the NIF is that it represents a pivot away from this debt-driven model. Instead of borrowing for infrastructure, the state would invest proceeds from asset sales and attract private capital. Treasury CS John Mbadi has argued that the fund will reduce pressure on the national budget and create a self-sustaining development vehicle [1].

But skeptics note a contradiction: if the fund itself is empowered to borrow, and if those borrowings are not classified as sovereign debt, the actual public debt exposure could increase while appearing to decrease on paper. This concern mirrors a broader dispute between Kenya and the IMF, in which Kenya has pushed to classify infrastructure-backed loans as project-specific liabilities rather than direct sovereign obligations — a position the IMF has resisted [19].

Source: World Bank Open Data

Data as of Feb 24, 2026CSV

Selling the Family Silver

A separate but related concern involves the sustainability of the fund's capitalization model. The KPC IPO and the Safaricom stake sale together represent the disposal of some of Kenya's most valuable public assets. During parliamentary debate, lawmakers warned that the government could eventually run out of assets to sell [10].

Safaricom, in particular, is not merely a telecommunications company — it is the backbone of Kenya's digital economy, the operator of M-Pesa, and a company whose profits flow directly into the national treasury through dividends. Selling a 15% stake to Vodacom generated immediate capital but permanently reduced the government's claim on future earnings [6].

The question of whether these one-time proceeds can genuinely seed a self-sustaining fund — as opposed to being consumed by the first wave of projects — remains unanswered.

The Amendments: Enough Safeguards?

To be fair, the version of the Bill that was signed into law was not the same version that the Auditor General criticized. The National Assembly introduced several amendments aimed at strengthening oversight [20]:

• The Treasury Cabinet Secretary is now required to submit the Fund's Investment Policy to the National Assembly for approval, with Parliament given 90 days to approve, amend, or reject it.
• Misappropriation of fund assets carries mandatory repayment of twice the stolen amount, a minimum fine of KSh 10 million, or a minimum five-year prison sentence [1].
• Board composition was restructured to require four independently-recruited directors with professional qualifications.
• New mechanisms were introduced for parliamentary approval of how the Fund's resources are appropriated [20].

National Assembly Majority Leader Kimani Ichung'wah described the amended Bill as "one of Kenya's most significant pieces of legislation," framing it as essential to "reducing debt reliance while advancing long-term development ambitions" [1].

Whether these safeguards will prove sufficient depends on implementation — and on the willingness of institutions like the Auditor General, the Controller of Budget, and the judiciary to enforce them.

The Track Record Problem

Kenya's history with large-scale infrastructure financing provides both inspiration and cautionary tales. The Standard Gauge Railway, built with Chinese financing and completed in 2017, remains the single largest infrastructure investment in the country's post-independence history. It has been dogged by allegations of corruption, cost overruns, and questions about whether traffic volumes justify the investment [18].

More broadly, the Ethics and Anti-Corruption Commission has estimated that Kenya loses approximately $6 billion annually to corruption [21]. Between 2013 and 2018, the government lost at least KSh 567.4 billion ($4.4 billion) to graft, with procurement fraud particularly prevalent in infrastructure and county-level spending [21].

This track record is the lens through which many Kenyans view the NIF. The fund's corporate structure, its distance from traditional parliamentary oversight, and the scale of resources it commands — potentially exceeding the national budget in cumulative terms — amplify anxieties in a country where public trust in institutions is already fragile.

What Comes Next

The constitutional petition against the NIF Act remains before the courts, though the High Court declined on March 11 to suspend the Act pending a full hearing — meaning implementation can proceed while the legal challenge plays out [13]. The government has signaled that it expects to mobilize approximately KSh 2.5 trillion — half the fund's target — by April 2026 [7].

Whether the NIF becomes a transformative vehicle for Kenya's development or another chapter in the country's complicated relationship with large-scale public finance will depend on factors that no legislation can fully control: the integrity of appointed officials, the independence of oversight institutions, the vigilance of civil society, and the willingness of courts to enforce constitutional limits.

The stakes are not small. Five trillion shillings is not just an infrastructure budget — it is, as both supporters and critics understand, a bet on whether Kenya's institutions are strong enough to manage wealth at a scale that would test even the most robust democracies.