Why Ruto's infrastructure Fund is in the spot

‎President William Ruto at Ngarachi Comprehensive School in Laikipia west during the beginning of his tour of the Mt. Kenya region on April 1,2025.[FILE,Standard]

The idea of a National Infrastructure Fund (NIF) as the magic wand that will transform Kenya into a first-world economy has been criticised by experts who have also questioned the Cabinet’s plan to create a limited liability company to house the Fund.

For a country that is evidently struggling economically, with a debt that is inching closer to Sh13 trillion, governance experts argue that such a Fund equates to mortgaging the nation’s assets and taxpayers at large.

Such a Fund, they say, should be supported through surplus income, like other economies that Kenya is mimicking, and not become dependent on domestic financing or crowdsourcing.

Considering the Fund will be domiciled in a limited liability company, by extension, it means owners of this private entity, through their shareholding, may have a stake in not only the country’s assets but also future income through taxes.

The experts further argue that it is more prudent for the Government to reduce on its inefficiencies, especially in project implementation whose costs are largely inflated, and weed out corruption that has been proven to cost the economy in excess of Sh3 billion daily.

The establishment of the National Infrastructure Fund and the Sovereign Wealth Fund, as communicated on Monday through a Cabinet dispatch, has been described as Kenya’s bold step towards transforming the country into a first-world economy.

President William Ruto at the Commissioning of Kasikeu and Mikuyu Bridges and approach roads in Makueni County. [PCS]

Development and economic transformation will henceforth be anchored on these two Funds.

“Approved as a limited liability company, the National Infrastructure Fund will serve as the central engine for aligning the administration’s financial resources with national development priorities,” read the dispatch in part.

The NIF will be funded through mobilisation of domestic resources, strategic monetisation of mature public assets, democratisation of ownership through capital markets and deployment of national savings.

Alfred Omenya, a policy and governance expert, says countries such as Norway have created Funds but through surplus income.

“Here, of course, we have said it will be a private company so that it does not burden taxpayers. That makes sense. But on the other hand, what would be the basis of this company raising Funds? Can anybody just create a company and go into the stock market to raise Funds?” he posed during a talk show on Standard Group’s Spice FM.

Omenya says while this will be a private company, the ultimate security of those Funds, for the sake of those who would have deposited into the basket, would be Kenyans.

“Whether we like it or not, the Funds will have to be secured by our taxes,” he says.

President William Ruto at the Commissioning of Kasikeu and Mikuyu Bridges and approach roads in Makueni County. [PCS]

He argues that the creation of this Fund, by extension, mirrors President William Ruto’s drive to privatise government assets.

“It is a terrible thing,” he says. “We create Funds out of surpluses. Ours is a borrowing model. If we have to create a Fund, then we have to save diligently.”

Norway is arguably the country with the largest Fund (Government Pension Fund Global) valued at over Sh260 trillion ($2.007 trillion) by the end of September 2025. This is according to Norges Bank Investment Management.

This Fund is capitalised through Norway’s oil and gas ventures. The proceeds are invested in stocks, bonds, real estate, and renewable energy.

Separate business

Singapore, which President Ruto drops liberally in his speeches, manages its financial assets through two main private institutions: the Government of Singapore Investment Corporation (GIC) and Temasek.

President William Ruto at the Commissioning of Rironi-Mau Summit Road construction. [PCS]

GIC manages the government’s financial assets, mainly foreign reserves, while Temasek, established in 1974, takes care of investments and assets that were previously held by the government.

The intention to create Temasek was to separate the government from its businesses. According to GIC, Singaporeans benefit from returns of GIC as well as those of the Monetary Authority of Singapore (MAS), an equivalent of the Central Bank, and Temasek.

“The Net Investment Returns Contribution (NIRC), estimated to be $21.09 billion (Sh2.7 trillion) in Financial Year 2025, has allowed the government to make further investments for the long term, such as education, research and development, healthcare and improving our physical environment,” says GIC on its website.

Africa Policy Institute chief executive Peter Kagwanja dismisses the creation of the National Infrastructure Fund as the catapult of a Singapore-like Kenya.

“How many countries have Funds?” Prof Kagwanja posed during the Spice FM show, listing Singapore, China, and Norway as other economies with Funds.

“China has multiple Funds not just for itself but for the rest of the world, like the Belt and Road Initiative. The question is: what do you want to do with the Fund? Where is the roadmap? Where is the script?”

Kagwanja says the major concern about the Fund is that it is going into mega projects that do not directly support production at the grassroots level. He describes this as a model that sustains a lazy economy.

He said Singapore and Japan have grown by being producers, not consumers.

“It is like we are determined to walk but walk on our heads,” he said.

But Central Organisation of Trade Unions (Cotu) Secretary General Francis Atwoli has thrown his weight behind the Infrastructure and Sovereign Fund, saying workers are also in support.

Atwoli says those criticising the venture are cynics standing in the way of Kenya’s future by professing fear.

President William Ruto at the Commissioning of Rironi-Mau Summit Road construction. [PCS]

“As Kenyan workers, we refuse to be held hostage by short-term thinking and reactionary politics meant to undermine the welfare of the Kenyan workers and the economic development of our beloved country,” Atwoli said in a statement on Tuesday.

He said the academics, economists, and think tanks should rally behind the Fund because it will secure the future of workers and their families.

“We urge those who doubt this path to visit countries such as Malaysia and Singapore, where long-term infrastructure planning and sovereign investment vehicles laid the foundation for industrialisation, job creation and rising living standards,” added Atwoli.

The Cabinet approved that all privatisation proceeds will be ring-fenced and invested strictly in public infrastructure projects that generate and preserve long-term value.

“Every shilling invested through the Fund is expected to crowd in up to Sh10 additional shillings from long-term investors, including pension Funds, sovereign partners, private equity Funds and development finance institutions,” reads the dispatch.

The Sovereign Wealth Fund for Kenya looks to mimic what Norway has as it will receive proceeds from sale of minerals and petroleum, and dividends from public investments.

“Anchored on inter-generational savings, protection against external shocks and strategic investments with commercial returns, the Sovereign Wealth Fund will strengthen fiscal discipline,” reads the dispatch.

President Ruto, speaking during the Bamburi Cement Plc Matuga clinker factory construction contract signing on Tuesday, said investors are already aligning to the Sh5 trillion vision.