President William Ruto has signed into law the Sovereign Wealth Fund Bill, clearing the way for the establishment of Kenya's first sovereign wealth fund in a move aimed at protecting national wealth, preparing the country for future economic shocks and creating a long-term source of funding for strategic development.
The new law provides the legal and institutional framework for the creation, governance and management of the Sovereign Wealth Fund, which is expected to safeguard national savings while supporting key investments that will benefit both current and future generations.
The legislation delivers on a commitment President Ruto made during his 2025 State of the Nation Address, when he pledged to establish a long-term national savings vehicle alongside the National Infrastructure Fund.
Before reaching the President's desk, the proposal received Cabinet approval and was later introduced in the National Assembly by Majority Leader Kimani Ichung'wah. It was then subjected to public participation and scrutiny by the Departmental Committee on Finance and National Planning before being passed.
The Act creates three separate funds, each with a specific role in supporting the country's economic future.
One of them is the Stabilization Fund, which is designed to help the government respond to major economic disruptions. The fund will be used to cushion the country against extraordinary macroeconomic shocks such as pandemics, global financial crises, natural disasters and conflicts that interrupt economic activity.
The second is the Strategic Infrastructure Investment Fund, which will be used to mobilise resources together with private investors to finance major national infrastructure projects. The goal is to reduce reliance on public borrowing while supporting long-term development.
The law also establishes the Future Generations Fund, which has been identified as the central pillar of the Sovereign Wealth Fund. It requires that at least 30 per cent of all deposits into the fund be directed to this component, giving it the highest level of legal protection under the Act.
Money allocated to the Future Generations Fund cannot be used as security for borrowing and is protected from high-risk investment decisions to ensure national wealth is preserved for generations to come.
To oversee the fund, the legislation establishes an independent board that will be responsible for its governance and management. The board will consist of a chairperson appointed by the President, the Cabinet Secretaries responsible for the National Treasury, Mining and Petroleum, as well as four professionals recruited competitively based on their expertise.
The board will appoint qualified investment managers and ensure all investments meet strict governance and accountability standards.
The law also places limits on how the money can be invested by prohibiting investments in speculative derivatives, certain private equity ventures and other high-risk financial instruments in an effort to safeguard public resources.
Management of the Sovereign Wealth Fund will be governed under the Public Finance Management Act, while withdrawals will be subject to oversight, including approval by the Controller of Budget in cases provided for under the law.
In addition, the legislation contains four schedules outlining governance procedures, investment guidelines, withdrawal rules and the management of the board's affairs.
The Sovereign Wealth Fund is expected to complement the National Infrastructure Fund by providing a sustainable source of long-term capital for national development while preserving Kenya's wealth for future generations. https://x.com/RadioGenKe/status/2074754988924944498?s=20