Key Details of the newly enacted Sovereign Wealth Fund Law in Kenya

The Sovereign Wealth Fund Act, 2026 (formerly the Sovereign Wealth Fund Bill, 2026) was signed into law by President William Ruto on July 8, 2026, at State House, Nairobi.

This new law establishes the Kenya Sovereign Wealth Fund (KSWF) as a public fund owned by the National Treasury and held in trust for Kenyan citizens.

Its main goals are to manage and invest revenues from natural resources (primarily petroleum and mining), promote long-term fiscal sustainability, cushion the economy against shocks, fund strategic infrastructure, and ensure intergenerational equity.

Key Components of the Fund

The Fund has three distinct components:

Stabilisation Component — Cushions the national government and economy from revenue volatility, commodity price shocks, and extraordinary events (like pandemics, global supply disruptions or financial crises). It acts as a short-term buffer.

1. Strategic Infrastructure Investment Component — Finances key national and county development priority projects, often in partnership with the private sector to attract additional financing.

2. Future Generations (Urithi) Component — Builds long-term savings and an endowment for future generations once extractive resources decline. It generates alternative income streams and ensures wealth sharing across generations. 30% of mineral and petroleum revenues deposited into the Fund are mandatorily transferred here (increased from an earlier 10% proposal via parliamentary amendments).

Funds are first deposited into a Holding Account at the Central Bank of Kenya (in domestic and foreign currencies) before allocation to the components. The remaining 70% is split between the Stabilisation and 

Infrastructure components based on proportions set annually by the National Treasury Cabinet Secretary in consultation with the Fund’s Board.

Revenue Sources

Primary sources include:

1. Government’s share of profits from upstream petroleum operations (subject to exclusions under the Petroleum Act of 2019).

2. Petroleum and mining royalties.

3. Bonus payments.

4. Earnings from government participation in mineral/petroleum operations.

5. Proceeds from divestment/sale of government interests in these sectors.

Other allocated monies, including potentially from public investments or privatisation proceeds.

Initial capitalization is estimated around KSh 200 billion, drawn mainly from these natural resource revenues.

Investment Restrictions and Safeguards

To protect the Fund:

1. Investments are restricted to foreign, liquid, investment-grade assets.

2. Prohibited: Speculative derivatives, unlisted securities, private equity, Kenyan real estate, commodities, art, securities issued by Kenyan entities, or Nairobi Securities Exchange-listed assets (for certain components).

3. The Future Generations Component is strongly protected: It cannot be used for advances, loans, credit, collateral for borrowing, or other government debt obligations.

4. Strong governance, transparency, audit, and reporting requirements apply (including by the Auditor-General).

Governance and Other Features

The Fund is managed by a Board, with oversight mechanisms for accountability.

It aligns with broader public finance principles under the Constitution and Public Finance Management Act.

The law aims to enhance fiscal resilience, reduce reliance on borrowing, attract investment and promote prudent resource management

This enactment follows earlier unsuccessful attempts (like the 2014 Bill, drafts in 2025) and addresses lessons from prior proposals. It positions Kenya among countries using sovereign wealth funds for sustainable resource management.