The establishment of a Sovereign Wealth Fund in Kenya mirrors the famous saying that a journey of a thousand miles begins with a single step; with this Fund, the destination has finally been reached.  Vision 2030, a long-term development blueprint launched by President Kibaki’s government in 2006, sought to bequeath to future generations a much better Kenya.   

In 2010, the Constitution of Kenya anchored the principle of intergenerational wealth sharing under Article 201 (c). It states that “the burdens and benefits of use of resources and public borrowing shall be shared equitably between present and future generations”.  In 2013, the Jubilee Coalition Manifesto proposed establishing an in-country sovereign wealth fund based on international best practices as part of its energy and oil-and-gas policy. This occasioned the National Sovereign Wealth Fund Bill, 2014, which unfortunately did not materialise.    

A comparable proposal surfaced during deliberations on the Mining Bill, 2014, when the Government considered establishing a sovereign wealth fund, but the idea was ultimately never realised. In 2019, the government proposed the Sovereign Wealth Fund Bill, 2019, which kept that same determination alive.   

In 2025, during the State of the Nation Address, President Ruto reignited the conversation by stating that the government will be establishing the Sovereign Wealth Fund to give full effect to the constitutional principle of intergenerational equity. In 2026, the Sovereign Wealth Fund Bill, 2026, was published on 25th February 2026 and assented to as law by President Ruto on 8th July 2026.   

Key Highlights of the Sovereign Wealth Fund Act  

Purpose of the Fund  

The Sovereign Wealth Fund is established to: 

1. Provide the national government with a buffer from extraordinary shocks which may affect macroeconomic stability.   

1. Provide finance for strategic infrastructure investment priorities.  

1. Build a savings base for future generations when the minerals and petroleum resources are exhausted.  

Sources of the Fund  

The Act provides for the following as sources of the Sovereign Wealth Fund. 

1. The National Government’s share of profit derived from upstream petroleum operations. 

1. All petroleum royalties payable to the National Government.  

1. All mining royalties payable to the National Government. 

1. All bonus payments on grants or when production levels or prices of petroleum operations reach a defined level. 

1. All payments on grants or assignment of mining rights. 

1. All earnings from direct or indirect participation interest of the Government in minerals and petroleum operations. 

1. All proceeds from divestment from petroleum and mining interests held by the Government. 

Components of the Fund  

The Act establishes three distinct components of the Sovereign Wealth Fund:  

1. The Stabilisation Component to provide the national government with resources for management of extraordinary shocks which may affect macroeconomic stability. 

1. The Strategic Infrastructure Investment Component to provide funding for strategic infrastructure investment. 

1. The Future Generations Component to provide an endowment to support Strategic Infrastructure Investment for future generations; and distribute wealth across generations.  

Conclusion  

Importance of Sovereign Wealth Funds  

Many nations, including Norway’s Government Pension Fund Global, which was created in 1996 and is one of the most successful sovereign wealth funds, have created such funds to manage their wealth and invest in global markets. Sovereign Wealth Funds help build resilience and stabilise national economies by setting aside surplus revenues during boom periods that can be utilised as a buffer during economic downturns.