President William Ruto has revealed bold plans to introduce two critical funds, including an infrastructure fund to drive Kenya’s development agenda while reducing reliance on debt and commercial borrowing.
Speaking during a church service in Meru County on Sunday, October 5, the Head of State disclosed that he had already engaged all Members of Parliament and tasked them with preparing legislation to establish an Infrastructure Fund and a Sovereign Wealth Fund, to anchor Kenya’s long-term economic stability
He specifically mentioned the Infrastructure Fund as a critical tool to finance the construction of dams and roads without over-relying on infrastructure bonds.
“I have spoken to all MPs to come up with two legislations, including an Infrastructure Fund to build dams. If it costs us Ksh600 billion, so be it,” the President said.
He added, “In the three years, we have laid the foundation. What we have done in three years is good, but not enough. We need to raise our standards. We have dealt with average for too long. It is time for us to elevate our game to take this country to the next level."
Part of the reason Ruto is pushing for an infrastructure fund is the strong notion that Kenya was operating below its potential.
“We need 10,000 megawatts of electricity. We only have 2,300 megawatts. We must move to the next level,” the President noted, indicating that a significant portion of the Infrastructure Fund would be used to expand energy infrastructure.
On the other hand, the Sovereign Wealth Fund will be designed to manage proceeds from state assets and privatisation, which will allow the government to invest in high-return projects.
He added, “The MPs have agreed with me. We have developed a privatisation programme and a monetisation programme so that we can change our country from a third world to a first world, like South Korea and Singapore."
The Sovereign Wealth Fund was first introduced through a Bill in 2019 during Uhuru Kenyatta's tenure. The Bill proposed the creation of a fund to manage surplus revenue from state-owned enterprises.
However, the Bill did not pass Parliament.
As far as the infrastructure fund is concerned, the key focus will be on financing key public projects while reducing the over-reliance on public borrowing. Ruto cited several dam projects in Meru County which stood to benefit from an infrastructure fund.
Incidentally, the President's remarks coincided with the arrival of a team from the International Monetary Fund (IMF), who recently jetted to the country for talks with the government for another IMF-supported programme.
Central Bank of Kenya (CBK) Governor Kamau Thugge, in a statement earlier this year, said the team will also conduct a deep assessment of the country's economic and financial policies and a debt sustainability analysis, before the lender gives a green light to a new funding agreement.
