Kenya’s plan to launch a KSh 5 trillion National Infrastructure Fund, billed as a self-sustaining engine to finance highways, railways and airports without leaning further on taxes or sovereign borrowing, could run into constitutional headwinds.
- •The Auditor General, Nancy Gathungu, told lawmakers the proposal holds transformative potential but, in its current form, risks misalignment with the existing public-finance statutes.
- •Her intervention has shifted the debate from whether the fund can accelerate development to whether it is legally and fiscally airtight.
- •The Auditor General identified several oversight gaps that could expose taxpayers to unforeseen financial risk, including provisions that appear to bypass the Controller of Budget’s mandate to authorize withdrawals, raising the prospect of public funds moving outside established legal guardrails.
“While this Bill introduces a transformative framework for financing national priorities, this stakeholder engagement is critical in order to ensure that the Bill’s framework upholds the highest standards of accountability”, Gathungu told parliament’s Finance and National Planning Committee.
She also noted that the National Infrastructure Fund Bill provides four months to submit financial statements, in tension with the Public Audit Act’s three-month requirement. In a further complication, the bill establishes parallel executive lines; a chief executive officer appointed by the Board and a Fund Administrator designated by the National Treasury, creating potential ambiguity over accountability.
Most strikingly, she noted a structural paradox: while the Fund’s stated objective is to reduce reliance on public debt, clauses of the bill prioritize debt as a primary financing strategy. That tension raises the possibility that borrowing could migrate into a new vehicle even as it is rhetorically displaced. The Fund’s architecture also risks overlap with the National Treasury’s Directorate of Public Investment and Portfolio Management, potentially blurring institutional lines.
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Like lawmakers, Gathungu has also questioned the sustainability of selling high-performing state assets to capitalize the Fund, particularly in the wake of the government’s divestiture from Safaricom and the sale of shares to Vodacom.
"The sale of the assets may also mean that at a point in the future, there may be no more assets to sell. Future generations will be overburdened by the current decisions,” the Auditor General said.
The Institute of Public Finance (IPF) has warned that channeling privatization proceeds into the fund could conflict with sections of the Privatization Act, which directs such funds to the Consolidated Fund. It also argued that the decision not to anchor the fund under the Government Owned Enterprises Act could weaken parliamentary scrutiny at the formative stage.
“Structuring the Fund through this legislative route was perceived as circumventing robust parliamentary scrutiny at the formative stage and, consequently weakening the safeguards of public oversight ordinarily associated with public finance institutions. For a Fund of this scale and fiscal consequence, statutory clarity and legislative alignment are indispensable,” said Veronica Ndegwa, representing the IPF.
On the other hand, stakeholders from the Institute of Certified Public Accountants of Kenya (ICPAK) called for clearer definitions in the interpretation clause, noting the absence of terms such as development, fiscal risk and national infrastructure pipeline, despite their repeated use in the Bill. Without a legally precise definition of “national infrastructure,” they cautioned, the scope of projects eligible for funding could expand ambiguously beyond rigorous national investment standards.
Audit firm PwC backed the creation of the Fund as a timely response to chronic infrastructure financing gaps but urged mandatory consultation with county governments, warning that exclusion risks duplication, conflicts with devolved functions and constitutional friction.
According to the bill, the Cabinet Secretary for Finance will also set the directors’ remuneration. Gathungu said that this could contravene the constitutional role of the Salaries and Remuneration Commission (SRC).
Meanwhile, before the same committee, Treasury Cabinet Secretary John Mbadi framed the National Infrastructure Fund as an investment vehicle that would recycle returns from commercially viable projects back into itself, compounding capital over time. He stated that projects on the pipeline include the dualing of Thika Road, expansion of the Athi River–Namanga corridor, and the modernization of Jomo Kenyatta International Airport (JKIA).
Parliament now faces a choice: to refine the guardrails and harmonize the Bill with existing law, or risk launching a flagship fund under a cloud of legal ambiguity. In Kenya’s crowded fiscal landscape, ambition is abundant but without constitutional paladins, it may inevitably wilt.
