Kenya is establishing a sovereign wealth fund and an infrastructure fund to channel investment into key sectors while curbing dependence on borrowing, President William Ruto announced over the weekend.
The move comes as Kenya faces one of the highest debt service-to-revenue ratios in Africa, following a decade of heavy borrowing for infrastructure development.
“We are in the process of setting up two important funds — one for infrastructure and another, which we are going to roll out soon, as a sovereign wealth fund,” President Ruto said.
He explained that the initiative will be financed partly through a new privatisation programme, after lawmakers passed legislation allowing the sale of government stakes in state-owned enterprises.
“As responsible citizens, we must think about future generations and ensure we leave them with resources to build on,” Ruto said.
The privatisation drive will begin with the sale of shares in the Kenya Pipeline Company (KPC) — the state entity responsible for petroleum transportation infrastructure — expected to raise up to 130 billion shillings ($1.01 billion).
According to Ruto, proceeds from the infrastructure fund will be directed toward agricultural development, particularly boosting crop production for export, and expanding electricity generation to support industrialisation.
Kenya currently has an installed power generation capacity of 2,300 megawatts, but Ruto said the country needs at least 10,000 megawatts to achieve its industrial goals.
“For far too long, we have been on an average trajectory, and that is why we are not making the progress we should,” he said.
The president did not specify when the two funds would become operational but emphasised that they are part of his administration’s long-term strategy to ensure sustainable economic growth without repeating past patterns of unsustainable borrowing.
Source:Africa Publicity
