President William Ruto has unveiled a new strategy to finance Kenya's biggest infrastructure projects without introducing new taxes or increasing public debt, saying the government will instead use public funds to attract private investment for national development.
Speaking at State House, Nairobi, on Wednesday during the signing of the Sovereign Wealth Fund Act, the President said the new financing model will be driven by the National Infrastructure Fund (NIF), which will mobilise private capital for large-scale projects while easing pressure on the country's budget.
Ruto said the planned Sh150 billion expansion of Jomo Kenyatta International Airport will be the first major project to be financed under the new approach.
According to the President, the government will inject Sh20 billion from the National Infrastructure Fund to attract the remaining investment from private financiers instead of borrowing the money or raising taxes.
"We cannot build that project using our budget because it's heavy. So, we will not borrow, and we will not add additional taxes," the President said.
"What is going to happen is that we are going to use Sh20 billion of the money we raised under our National Infrastructure Fund to crowd in the balance of the money from the private sector. That is how innovation works in the transformation of a nation," he added.
Ruto said the National Infrastructure Fund was created to close the financing gap for major development projects by bringing together domestic savings and investments from financial institutions such as banks, pension funds and private investment firms.
He said the expansion of Jomo Kenyatta International Airport will serve as the first demonstration of how the model can finance strategic infrastructure without placing additional financial pressure on taxpayers or adding to the country's debt.
The President also explained how the National Infrastructure Fund differs from the newly established Sovereign Wealth Fund, saying the two institutions have separate but complementary roles in Kenya's economic plans.
He said the National Infrastructure Fund will finance infrastructure and other development projects, while the Sovereign Wealth Fund will preserve and grow the wealth created from those investments for future generations.
"If the National Infrastructure Fund builds the assets that grow our nation, the Sovereign Wealth Fund preserves and multiplies the wealth those assets create," he said.
Ruto said returns earned from strategic investments, together with future revenues from oil and mineral resources, will be channelled into the Sovereign Wealth Fund to build long-term national wealth and ensure future generations benefit from the country's natural and economic resources.
He said the two funds are central to the government's long-term economic agenda, adding that Kenya must invest in development while also setting aside wealth for the future instead of spending all the returns generated today.