 |
| National Infrastructure Bill-2025 |
The Context
Since 2002, when the late President Mwai Kibaki took over power, Kenya has continued to pursue an ambitious infrastructure agenda. From roads, rail, energy, and water infrastructure, the country has seen an outburst of these infrastructures, though at a cost. The country's public debt has significantly skyrocketed, straining its fiscal sustainability. That has continued to raise concerns about the nation's sustainability and future borrowing capacity, especially from the opposition. Traditional debts and budget allocations have reached their limits, prompting policymakers to seek alternative funding models.
Amid opposition from civil societies and a section of opposition leaders, President William Ruto and the National Treasury see this as a strategic response to the already shrunken budget and the huge public debt. The fund is expected to raise Kshs. 5 trillion and is considered a long-term transformation agenda intended to bridge the infrastructure financing gap.
In late 2025, the parliament embarked on a journey to reshape how kenya's finances its large-scale infrastructure. At the core of this effort is a fund that has caused uproar among a section of the political class. The National Infrastructure Fund Bill 2025 is considered a transformative legislative proposal by its proponents, designed to establish a structured investment vehicle to mobilize funds for critical infrastructure. It seeks to get the country out of dependence on public debt. So what really is this bill about? This article unpacks the objectives, structure, implications, and controversies surrounding the bill and what it means for Kenya's economic future.
Understanding the National Infrastructure Fund Bill
At the center of this bill is the establishment of a national infrastructure fund as a formal entity. It sets out a framework for creating, managing, governing, and financing the fund. The overarching goal is to mobilize resources for major infrastructure projects and other catalytic national assets. Furthermore, the bill seeks to move the country away from depending on public debt to finance its infrastructural development. The bill gives the board powers to partner, invest, and mobilize resources from diverse sources.
Key Provisions of the Bill
The bill on parliament on 23rd January 2026 proposes the creation of the national infrastructure fund as a legal entity, with a defined governance framework. The fund will be established and managed under the provisions of the Act and will be accountable to the parliament and the law.
The fund will be managed by a board of directors consisting of a chairperson, a cabinet secretary, four independent directors, a chief executive officer, and two persons with proven experience in senior leadership roles in development banking.
The purpose of the fund is to mobilize resources from private and non-traditional sources, to scale up and accelerate development of catalytic national infrastructure, to reduce the reliance on public debt for infrastructural development, and to strengthen the national capacity for origination, structuring, and execution of large and complex infrastructure projects.
The bill also specifies multiple potential sources of capital for the national infrastructure fund, including proceeds from privatization and disposal of government assets (article 29), funds appropriated by parliament, donations, funds raised through capital markets, or private capital mobilized from institutional investors.
The national investment fund is mandated to invest in large, commercially viable projects capable of generating sustainable economic returns. Such projects include transport networks, energy generation and transmission, water and irrigation systems, and agribusiness infrastructure.
Economic and Development Implications
If fully enacted and implemented, the NIF could enable faster and more predictable financing of major projects. A financing structured around long-term capital commitments will reduce delays and financing gaps.
The fund is also expected to reduce pressure on public debt by diversifying beyond traditional sovereign debt. This will free up fiscal space for other priorities.
Criticisms and Risks
Although the proponents are framing the NIF as a transformative vehicle, analysts and civil societies have criticized the bill. Concerns over governance have been raised, with the critics cautioning that too much discretionary power may remain with the executive. This is especially true for board appointments and regulatory settings. Failure to properly balance this with transparent oversight could undermine investor confidence and accountability.
Other critics argue that privatizing profitable assets through the sale of stakes could sacrifice long-term revenue in exchange for short-term infrastructure financing. Moreover, there is fear that the public sector could bear contingent liabilities or future obligations that are not fully transparent when mobilizing private capital due to the complex financial structuring involved.
Conclusion
The country's public debt is at an all-time high, and alternative sources of funds to fund the country's infrastructural development are a good move. The National Infrastructure Fund Bill, 2025, represents a bold move by policymakers to modernize infrastructure financing. If enacted by parliament and implemented, the confidence of investors in the fund will be pegged on strong governance and transparency. The fund has the potential of accelerating delivery of critical infrastructure and attract significant long-term investment. However, it also carries risks that will call for strong oversight and clear regulatory frameworks. Its success will depend on implementation quality as well as legislative intent.
.jpeg)
0 Comments