Unpacking the Kenya Sovereign Wealth Fund Bill, 2025
Background and Context
As Kenya moves towards commercial oil, gas, and expanded mineral extraction, the governance of extractive revenues has become an increasingly urgent public policy issue. In response, the Kenya Sovereign Wealth Fund (SWF) Bill, 2025 was approved by Cabinet, proposing a legal framework for managing revenues from oil, gas, and mining royalties.
Ahead of the Bill’s consideration by Parliament, AWEIK convened a technical webinar to unpack the draft legislation, examine its governance and investment framework, and gather expert and civil society perspectives. The webinar brought together legal experts, public finance specialists, energy transition practitioners, and civil society actors to interrogate whether the proposed Fund would safeguard public resources, promote transparency, and advance long-term national and intergenerational interests.
The insights generated during the webinar are particularly timely as the Bill moves into the legislative and public participation phase, where scrutiny, amendments, and safeguards can still be strengthened.
The webinar sought to:
- Analyse the proposed governance and institutional design of the Sovereign Wealth Fund
- Assess risks and opportunities related to transparency, accountability, and political interference
- Examine proposed investment strategies, particularly in relation to fiscal stability and the energy transition
- Consolidate expert and civil society inputs to inform parliamentary submissions, public participation, and legislative advocacy
The proposed Sovereign Wealth Fund under the Kenya Sovereign Wealth Fund Bill, 2025 is intended to manage revenues from:
- Oil and gas production
- Mining and other extractive sector royalties
The Bill proposes a Fund structured around three core components:
- Stabilization Fund – to cushion the economy against revenue volatility and commodity price shocks
- Infrastructure Investment Fund – to finance strategic national development priorities
- Future Generations Fund – to preserve wealth for intergenerational equity
The Bill outlines accountability measures including audits, reporting obligations, and sanctions for misuse of funds, positioning the proposed SWF as a key instrument in Kenya’s public finance and natural resource governance framework.
Alexander, an environmental law specialist, provided an overview of the proposed institutional structure of the Fund, including board composition and accountability mechanisms. Drawing comparisons with international best practices—particularly Norway’s Government Pension Fund Global (GPFG)—he underscored the importance of strong governance safeguards, fiscal discipline, and transparent reporting.
Participants noted that while the Bill establishes a governance framework, its effectiveness will depend on how independence, oversight, and accountability are secured in the final law and accompanying regulations.
Concerns were raised by Edgar and other participants regarding the potential for executive influence over the Fund, particularly through appointment powers. It was emphasized that without a technocratic, independent board with fixed and staggered terms, the Fund risks political capture.
Participants highlighted the Santiago Principles as an important benchmark for transparency, accountability, and sound governance, recommending their explicit adoption during the legislative and regulatory process.
The discussion highlighted vulnerabilities in the proposed withdrawal rules for the Stabilization Fund, which may undermine its core purpose if not clearly defined. Participants called for:
- Clear quantitative and rules-based triggers for withdrawals
- Strong fiscal rules to prevent discretionary or ad hoc access to funds
- Long-term protections for the Future Generations Fund, including extended lock-in periods
These safeguards were seen as essential to maintaining fiscal discipline, particularly in the context of Kenya’s rising public debt.
Mulwa emphasized the importance of clear tracking of SWF inflows and outflows, alignment with national development priorities, and transparency in investment decision-making. Participants stressed that the Fund should support inclusive, pro-people development while avoiding distortion of the domestic economy.
There was strong consensus on the need for conservative, clearly articulated investment mandates, especially during the early years of the Fund’s operation.
Raj highlighted the opportunity presented by the proposed Sovereign Wealth Fund to support Kenya’s energy transition through investments in renewable energy and sustainable infrastructure. Such investments were framed as a pathway to long-term fiscal stability, job creation, reduced fuel imports, and climate resilience.
Participants emphasized that aligning SWF investments with Kenya’s climate commitments and energy transition goals should be clearly reflected in the Bill and its implementation framework.
Civil society participants underscored that meaningful public participation is critical as the Bill moves through Parliament. Continued civic engagement was identified as essential for:
- Influencing governance and appointment provisions
- Strengthening transparency and reporting requirements
- Ensuring public access to information on Fund operations and investments
- Cabinet approval of the Sovereign Wealth Fund Bill, 2025 marks a significant step in Kenya’s extractives governance reform agenda
- Substantial risks related to fund independence, political interference, and fiscal discipline remain and must be addressed during the parliamentary process
- The final strength of the Bill will depend on amendments, regulations, and oversight mechanisms
- Strategic alignment with energy transition and sustainable development goals is essential
As the Kenya Sovereign Wealth Fund Bill, 2025 advances to Parliament, robust legislative scrutiny and public participation are critical.
AWEIK calls on:
- Parliament to rigorously review the Bill, strengthen independence safeguards, and ensure strong fiscal and transparency provisions
- Government and implementing agencies to engage openly with stakeholders and incorporate expert recommendations
- Civil society and the media to actively participate in public hearings and track proposed amendments
- Development partners and experts to support evidence-based inputs and the adoption of global best practices, including the Santiago Principles
- The public to engage in the legislative process to ensure extractive revenues are managed in the public interest
AWEIK will continue to convene stakeholders, coordinate civil society inputs, and advocate for a Sovereign Wealth Fund framework that advances equity, sustainability, and accountability for current and future generations.