Private pension schemes in Kenya are gearing up to invest up to KES 10 trillion in public infrastructure projects, in a strategic move aimed at reducing the country’s dependence on external debt.
This was announced by Dr. Hosea Kiili, President of the Association of Pension Trustees and Administrators of Kenya (APTAK), during the association’s 4th International Conference held in Mombasa.
Dr. Kiili said the new investment model is intended to tap into the vast pool of domestic capital held by pension schemes, Saccos, insurance firms, and banks, redirecting it toward critical development projects such as roads, railways, water systems, and affordable housing.“Pension schemes and other domestic institutions hold substantial investable funds that can be channeled into infrastructure,” said Dr. Kiili. “We want even the smallest contributors in Saccos and pension schemes to become shareholders in the infrastructure that transforms our country — benefitting from returns while contributing to national development.”Infrastructure as a Growing Asset ClassKenya’s pension fund industry has experienced significant growth, now comprising over 1,300 registered schemes that collectively manage assets equivalent to approximately 12 percent of the national GDP.
In a 2020 policy shift, the Retirement Benefits Authority (RBA) recognized infrastructure as a distinct asset class, permitting pension funds to invest up to 10 percent of their total assets in the sector.
Despite this provision, the industry continues to invest over 80 percent of its funds in traditional government securities, missing the opportunity to diversify and make a tangible impact on Kenya’s infrastructure development.
The government has in recent years been encouraging pension funds and institutional investors to move beyond treasury instruments and participate in state-backed infrastructure initiatives.
The aim is to reduce the country’s reliance on foreign loans, which have contributed to Kenya’s rising debt levels. Empowering Local InvestorsAccording to Dr. Kiili, the shift toward infrastructure investment is not only a financial strategy but a socio-economic one.
By allowing smaller savers and contributors to invest in infrastructure, the model promises to democratize wealth creation and enhance public ownership in national development.“This is a model of empowerment — giving every Kenyan a stake in building the future,” Dr. Kiili said.
The announcement comes at a time when Kenya is seeking innovative financing solutions to bridge its infrastructure deficit, which has been a major constraint to economic growth and service delivery.
As pension funds prepare to scale up investments in infrastructure, sector players and policymakers are expected to focus on ensuring project viability, regulatory safeguards, and transparency to protect contributors’ savings while achieving national development goals.
The APTAK conference has drawn local and international experts to explore the evolving role of pension funds in sustainable development, financial innovation, and long-term economic planning.
