Kenya Revives Sovereign Wealth Fund Plan to Tackle Debt and Build Future Generations’ Savings

Kenya is taking another major step toward creating a Sovereign Wealth Fund (SWF) to manage natural resource revenues and reduce the country’s reliance on debt, more than a decade after the first attempt failed.

The National Treasury, led by Cabinet Secretary John Mbadi, has invited public input on the Kenya Sovereign Wealth Fund Bill, 2025, which seeks to establish a legal framework for managing and investing the country’s mineral and petroleum revenues for the benefit of current and future generations.

“The Fund will stabilize the economy, finance strategic infrastructure, and preserve savings for future generations,” Treasury said in a public notice.

A Second Attempt After a Decade

Kenya’s first Sovereign Wealth Fund proposal was introduced in 2014 by economist Dr. Mbui Wagacha but lapsed after the expected revenues from oil and coal reserves failed to materialize.

The new 2025 Bill revives that ambition with three key components:

1. Stabilization Fund – to cushion the economy from shocks such as pandemics or global commodity disruptions.
2. Strategic Infrastructure Investment Fund – to finance major projects in energy, ICT, transport, and housing.
3. Future Generation (Urithi) Fund – to preserve national savings for the long term.

How the Fund Will Be Financed

According to the Bill, the SWF will draw revenue from:

• The government’s share of profits from petroleum and mining operations.
• Royalties, bonuses, and license fees from mineral rights.
• Divestment proceeds from government-held petroleum or mining interests.

The government estimates that at least KSh 200 billion in annual mineral and petroleum income could seed the Fund. The Central Bank of Kenya will hold and invest the funds, while oversight will rest with the National Treasury.

A Step Toward Reducing Debt

President William Ruto has described the Fund as part of his long-term plan to reduce new borrowing by building a national savings buffer. Kenya’s public debt currently exceeds KSh 11 trillion, with significant portions going toward infrastructure financing.

Ruto said the SWF would ensure that “future generations are not burdened by today’s debts” and that revenues from the extractive sector benefit the wider economy.

Safeguards and Governance

The proposed law bars investment of the Fund in local speculative assets, unlisted real estate, or domestic securities to avoid political interference and misuse.

Instead, funds will be directed toward offshore investments, such as foreign currency bonds and deposits in reputable international banks, to protect Kenya’s reserves against internal economic turbulence.

Transparency will be central to the Fund’s operation, with public access to audited reports and performance updates encouraged through digital platforms.

Global and African Context

Globally, the Norwegian Government Pension Fund Global stands as the benchmark for successful sovereign wealth management, investing Norway’s oil revenues into global assets for the long-term benefit of its citizens.

In Africa, however, experiences have been mixed. Rwanda’s Agaciro Fund has grown steadily through citizen-backed contributions, while funds in Angola and Gabon have faced criticism for opacity and political meddling.

Kenya’s success, experts say, will depend on transparency, digital oversight, and professionalism in fund management.

The Bigger Picture

If implemented effectively, the Sovereign Wealth Fund could mark Kenya’s biggest fiscal reform since mobile money, transforming how the country manages natural resource wealth and reducing pressure on public debt.

Its long-term success will hinge on whether it can combine technology, integrity, and inclusivity — making every Kenyan see, in real time, how their nation’s wealth is growing.

In other news:Kenya in Talks to Compensate Adani for Cancelled KSh 96 Billion Power Project

Kenya Revives Sovereign Wealth Fund Plan to Tackle Debt and Build Future Generations’ Savings