President William Ruto, during the State Of The Nation address on Thursday, November 20, in the National Assembly, reiterated his ambitious dream of transforming Kenya into a first-world country in our lifetime.
This dream, President Ruto said, will require sustained, large-scale investment in roads, energy, water systems, logistics, and digital networks.
However, he noted that, as it is at the moment, the country cannot continue funding these essential infrastructure through unsustainable borrowing or burdening taxpayers with additional taxes.
Consequently, President Ruto proposed the formation of the National Infrastructure Fund, through an act of parliament, which will pool together resources to the tune of KSh 5 trillion that will fund the aforementioned projects.
"This fund is the strategic solution that will provide a framework to innovatively scale up our resources to match our ambition. It will fulfil our manifesto commitment to rebuild Kenya’s infrastructure while reducing reliance on debt.We will do this by using budgeted resources prudently and introducing a financing architecture that leverages capital markets, diversifies ownership through the unlocking of national assets through privatisation, and uses PPP frameworks to channel private capital into public priorities," said President Ruto.Further, he noted that for decades, Kenya has privatised major public assets, including Kenya Airways, yet the country cannot point to enduring national assets built from privatisation proceeds, because the funds were absorbed into budgets and spent.
As such, he said the National Infrastructure Fund will break this cycle. All proceeds from privatisation will be ring-fenced, preserved, and reinvested into new infrastructure and wealth-creating assets.
"When ownership shifts to the private sector for efficiency, the benefits to the public will not diminish; they will multiply. For every shilling invested from privatisation proceeds, we aim to attract ten shillings from long-term investors, drawn from pension funds, sovereign partners, private equity, and development finance institutions. This multiplier will allow us to build critical infrastructure without adding to the tax or debt burden," he added.This financing means has been used in Australia’s Future Fund, Singapore’s Temasek, and the UAE’s Mubadala.
