The World Bank has warned that Kenya’s newly established National Infrastructure Fund (NIF) will not by itself solve the country’s long-standing fiscal challenges despite its potential to finance major infrastructure projects.
In its latest Kenya Economic Update released on July 9, the lender said that although the Fund is expected to be financed through privatisation proceeds and asset sales, it will not address deeper challenges affecting revenue mobilisation and public spending efficiency.
The World Bank noted that Kenya must continue implementing fiscal reforms and strengthening revenue collection systems to achieve long-term economic stability.
"Privatisation efforts and asset sales are expected to fund commercially viable infrastructure projects through a new National Infrastructure Fund," the Bretton Woods institution said.
"However, this would not address the underlying structural weaknesses in revenue mobilisation and spending efficiency, underscoring the need for sustained fiscal consolidation and reforms," the report added.
Established under the National Infrastructure Fund Act of 2026, the Fund is one of the Kenya Kwanza administration’s flagship initiatives aimed at mobilising up to Ksh5 trillion to finance major infrastructure projects.
Unlike traditional borrowing, the Fund is designed to attract investment from private investors, pension funds, insurance companies and development finance institutions to finance commercially viable projects.
The government expects the initiative to support strategic developments, including the extension of the Standard Gauge Railway (SGR) to Malaba and the modernisation of Jomo Kenyatta International Airport (JKIA).
To raise capital for the Fund, the government has undertaken and plans further partial privatisation of selected state-owned enterprises, including Kenya Pipeline Company and East African Portland Cement.
President William Ruto has repeatedly described the National Infrastructure Fund as a key component of his administration’s economic transformation agenda, drawing inspiration from Singapore’s development approach.
Speaking at State House in Nairobi earlier this year, Ruto said the government would leverage pension funds and international development finance institutions to fund infrastructure projects while reducing reliance on external borrowing.
However, the World Bank cautioned that while the Fund could provide an alternative financing model for infrastructure development, Kenya’s wider fiscal position remains under pressure due to continued revenue collection challenges.
The warning comes a day after Treasury Cabinet Secretary John Mbadi appointed six members to the National Infrastructure Fund Board for a three-year term beginning July 8, 2026.
Through a gazette notice, Mbadi appointed James Mwirigi, Fahima Ali Ahmed Zein, Christopher Kibui Maranga, Latoya Ouna, Lawrence Kibet and Mohammed Abdirahman Hassan to oversee the Fund’s operations.
The government maintains that NIF will help accelerate infrastructure development and reduce dependence on public debt, while the World Bank says broader fiscal reforms will remain critical to ensuring sustainable economic growth.