John Mbadi, CS for Treasury and National Planning
Kenya is moving to establish a National Infrastructure Fund as part of a broader strategy to accelerate economic growth and address persistent development gaps amid rising public debt and shrinking fiscal space.
National Treasury Cabinet Secretary John Mbadi said traditional budget financing is no longer sufficient to support the country’s ambitious infrastructure agenda, noting that Kenya’s public debt, currently estimated at 68.8 per cent of GDP, has significantly constrained development spending.
Speaking on Thursday at Treasury, Mbadi said the country must urgently rethink how it finances development if it is to sustain economic transformation.
“The pressure from public debt has sharply reduced the resources available for development,” Mbadi said, adding that new financing models are necessary to ensure continued investment in critical infrastructure.
The proposed Infrastructure Fund is expected to mobilise about Sh600 billion, with roughly Sh300 billion already identified from the privatisation of the Kenya Pipeline Company and the partial sale of government shares in Safaricom.
According to the Treasury, the fund will blend public resources with private sector capital and focus on commercially viable projects in roads, energy, water and irrigation. Returns generated from these investments will be reinvested to finance future infrastructure projects, creating a sustainable funding cycle.
Mbadi made the remarks in his office while receiving a report from university student leaders under the newly launched National Students Budget Forum. The report outlines youth priorities in public finance management and seeks greater inclusion of young people in budget-making processes.
The government says the establishment of dedicated infrastructure financing vehicles will reduce reliance on public borrowing, crowd in private investment and help unlock long-term capital for development, even as Kenya grapples with limited fiscal space.