Ichung’wah defends National Infrastructure Fund as strategic shift from debt to investment

National Assembly Majority Leader Kimani Ichung’wah on Tuesday mounted a spirited defence of the proposed National Infrastructure Fund, telling the National Assembly that the Bill is a long-planned strategy to transform Kenya’s development financing model and reduce reliance on debt.

Moving the National Infrastructure Fund Bill at Second Reading, the Majority Leader dismissed claims that the proposal was an afterthought, arguing that it is firmly anchored in the Kenya Kwanza manifesto and subsequent legislative reforms.

“This Bill did not just find itself on the floor of this House,” Ichung’wah said. “It has a clear genesis and strategic thinking behind it.”

The Kikuyu Constituency MP traced the idea to commitments in the Kenya Kwanza manifesto to establish a fund financed through privatization proceeds of state corporations. He also cited the enactment of the Government-Owned Enterprises Act as providing the legal framework underpinning the proposed fund.

He referenced the President’s State of the Nation Address last year, in which four national priorities were identified: investment in energy, water for irrigation through the construction of 50 mega dams and 200 medium-sized dams, expansion of the road network, and extension of the Standard Gauge Railway.

According to Ichung’wah, the President made it clear that such capital-intensive projects cannot sustainably be financed through borrowing or by overburdening taxpayers.

“We cannot continue funding essential infrastructure through unsustainable borrowing or additional taxation,” he told the House, quoting from the address. “But neither can we postpone these imperatives without risking our future.”

A central feature of the Bill is the ring-fencing of proceeds from privatization and partial divestiture of government-owned assets.

Ichung’wah said that unlike in the past, when proceeds from the sale of public assets were absorbed into the national budget, the new fund will preserve and reinvest those resources strictly into infrastructure and wealth-creating projects.

He cited past privatizations of entities such as Safaricom and Kenya Power, arguing that private sector participation improved efficiency, expanded employment, and increased tax contributions.

“Many of these privatization proceeds have always gone into financing our budget, paying salaries or servicing debt,” he said. “This Fund will break that cycle.”

Under the proposal, proceeds from future IPOs and partial sales of government stakes, such as those contemplated in key state corporations, will be channeled into the Fund rather than into recurrent expenditure.

Addressing concerns about governance, Ichung’wah emphasized that the Fund will be managed by a competitively recruited board and secretariat, with strict performance contracts and evaluation mechanisms.

The Bill bars individuals who have held political office or been affiliated with political parties within the last five years from serving on the board, a provision he said is meant to shield the Fund from political patronage.

“This Fund must serve the national interest, not political interests,” he said.

The board will be required to develop an investment policy approved by the National Treasury Cabinet Secretary, specifying priority sectors, asset allocation, portfolio limits, and expected rates of return. It must also ensure that incomplete projects are prioritized before new ones are undertaken.

Ichung’wah argued that Kenya is not venturing into uncharted territory, pointing to successful sovereign and infrastructure funds globally, including Australia’s Future Fund, Singapore’s Temasek, and the UAE’s Mubadala.

“These are proven models,” he said, adding that Kenya must adopt similar instruments if it hopes to transition from a developing to a developed economy.

He linked the Fund’s objectives to transformative projects in energy generation, irrigation, transport infrastructure, ports, and airports.

He cited a missed opportunity involving a proposed multi-billion-shilling data centre investment in Naivasha, which he said stalled due to insufficient energy capacity.

“That data centre had the potential to employ hundreds of thousands of Kenyans directly and indirectly,” he said. “We lost that opportunity because we did not have adequate energy.”

The Majority Leader also urged MPs to consider the fiscal constraints imposed by the 2010 Constitution, including the constitutional requirement to allocate significant resources to county governments annually.

He cautioned against simplistic comparisons with previous administrations, arguing that today’s fiscal environment demands innovative financing mechanisms.

“These national imperatives are not for one leader or one Parliament,” he said. “They are for this generation and generations to come.”

The Fund will draw resources from: proceeds of privatization and disposal of government assets; Parliamentary appropriations; Donations, grants, loans, and other lawful accruals.

Ichung’wah stressed that proceeds from privatization would not be used to pay salaries, service debt, or finance recurrent expenditure.

Framing the Bill as historic, the Majority Leader challenged the 13th Parliament to seize the moment.

“It is this generation that will be remembered in the transformation of our Republic,” he said, urging members to rise above political expediency and legislate with a long-term national vision.