Kenya’s renewed push to establish a Sovereign Wealth Fund (SWF) marks a significant step toward strengthening fiscal resilience, promoting infrastructure investment, and safeguarding wealth for future generations.
The idea of a national wealth fund first surfaced in 2014 through the Kenya Sovereign Wealth Fund Bill (2014), developed by economist Dr. Mbui Wagacha. The proposal envisioned a fund with three core mandates savings, stabilization, and infrastructure development inspired by models such as Nigeria’s Sovereign Investment Authority. It was to be financed through revenues from natural resources, including oil and coal. However, with the collapse of the coastal coal projects and stalled oil fields in northern Kenya, the bill lapsed before implementation.
What is a Sovereign Wealth Fund?
A Sovereign Wealth Fund is a state-owned investment fund that manages surplus revenues often from exports, natural resources, or fiscal surpluses to achieve long-term national goals. Such funds serve as financial buffers, protecting economies from shocks like pandemics or global conflicts, while investing in profitable ventures to support future prosperity.
Globally, SWFs are members of the International Forum of Sovereign Wealth Funds (IFSWF), an organization promoting sound governance, transparency, and prudent investment practices. According to the World Economic Forum, while many SWFs are funded by oil or mineral revenues, African nations increasingly use them as strategic investment vehicles to drive development amid limited fiscal space.
Kenya’s New Sovereign Wealth Fund Bill, 2025
After more than a decade, Kenya is taking a second attempt at creating a sovereign fund. On October 24, 2025, National Treasury Cabinet Secretary John Mbadi invited public and stakeholder feedback on the Kenya Sovereign Wealth Fund Bill, 2025, aimed at managing natural resource revenues responsibly and sustainably.
The proposed fund will serve three main purposes:
- Stabilization Fund – to cushion the economy from resource revenue volatility.
- Strategic Infrastructure Investment Fund – to finance key national projects.
- Future Generation (Urithi) Fund – to preserve wealth for posterity.
How the Fund Will Be Financed
The fund will draw capital from:
- The government’s share of profits from upstream petroleum operations.
- Bonus payments from mining and petroleum rights.
- Proceeds from state divestments in extractive industries.
- Royalties, licenses, and other mineral revenues, as designated by the Treasury.
President William Ruto has expressed optimism that the fund will reduce Kenya’s reliance on public debt, with initial seed money expected from the Ksh. 200 billion earned through mineral-sector revenues. Oversight will lie with the National Treasury, while the Central Bank of Kenya will manage the fund’s holding account and investments.
A Three-Pronged Model for Resilience
The 2025 Bill introduces a three-pillar approach:
- Stabilization: Absorbing fiscal shocks from commodity price fluctuations.
- Infrastructure Investment: Funding transformative projects in ICT, energy, housing, and transport through Public-Private Partnerships (PPPs).
- Urithi (Savings): Building generational wealth to safeguard Kenya’s long-term prosperity.
To prevent misuse, the law restricts investments in local securities, unlisted real estate, or speculative assets, focusing instead on foreign currency instruments like bonds and offshore deposits to cushion against domestic volatility.
Lessons from Global and African Models
International success stories such as Norway’s Government Pension Fund Global, Singapore’s Temasek and GIC, and Abu Dhabi’s ADIA demonstrate the power of disciplined, transparent, and technology-driven fund management. In Africa, Rwanda’s Agaciro Fund stands out for its citizen-backed transparency, while Angola’s FSDEA and Gabon’s FGIS have faced criticism over political interference and lack of openness.
Governance and the Road Ahead
For Kenya’s SWF to succeed, experts emphasize robust governance, transparency, and digital oversight. Publishing real-time fund performance, holdings, and audited financial statements will be vital in building public trust.
If managed prudently, the Sovereign Wealth Fund could become one of Kenya’s most transformative financial innovations, mirroring the impact of mobile money on the country’s economic landscape not just by generating returns, but by showing citizens exactly how their national wealth is being invested.
The Kenya Sovereign Wealth Fund Bill, 2025, thus represents more than a fiscal tool it’s a generational commitment to economic sovereignty, transparency, and shared prosperity.
