Petitioners argue that the money in the National Infrastructure Fund does not belong exclusively to the national government, but also includes funds meant for county governments.
Petitioners have asked the High Court to stop the government from spending money deposited in the National Infrastructure Fund.
They argue that allowing withdrawals would sanction the use of public funds outside the framework established by the Constitution.
Activists and lobby groups asked the court to issue conservatory orders suspending the use of the fund pending the determination of a petition challenging the legality of its establishment.
Petitioners Kemunto Ateka and Frego Engineering Company Ltd argued that the fund creates a mechanism through which the government can spend public money outside established constitutional structures, without sufficient transparency and parliamentary oversight.
The court heard that once money held in the fund is withdrawn and spent, it may never be recovered.
The petitioners further argued that the resources do not belong exclusively to the national government, but also include funds meant for county governments.
They warned that proceeds from the privatisation of Kenya Pipeline Company Ltd and the planned divestiture of Safaricom shares could generate at least Sh400 billion, which they claim may be spent without approval from the Controller of Budget and without parliamentary oversight.
The Attorney-General opposed the application, arguing that the law establishing the fund enjoys a presumption of constitutionality after being enacted by Parliament.
The State also maintained that the petitioners had not demonstrated any violation of their fundamental rights and that the legislation, which came into force in March 2026, was enacted after thorough public participation.
“The petitioners have failed to satisfy the test for the issuance of conservatory order. The Act was enacted by Parliament after thorough public participation. They (the petitioners) had the opportunity to present their views,” a State counsel submitted.
The court is scheduled to rule on the application on July 23.
Petitioners argue that the money in the National Infrastructure Fund does not belong exclusively to the national government, but also includes funds meant for county governments.
Other petitioners challenging the fund include the Consumers Federation of Kenya (Cofek), Dr Magare Gikenyi, Eliud Matindi, Philemon Abuga and Dishon Keroti.
They argue that establishing a public fund through a limited liability company violates Article 201 of the Constitution, which sets out principles of public finance.
The petitioners also contend that the National Infrastructure Fund poses a threat to the Equalisation Fund by potentially diverting resources or duplicating functions already assigned to it.
According to the petitioners, a national government public fund can only be established through an Act of Parliament or under the Public Finance Management Act.
“A national public fund cannot be established under any other statutory regime, including as a limited liability company under the Companies Act,” Dr Gikenyi said.
He further argued that the government has failed to disclose how the fund will be administered, contrary to the principles of accountability and transparency contained in the Public Finance Management Act and the Public Finance Management (National Government) Regulations.
Treasury Cabinet Secretary John Mbadi, however, defended the establishment of the National Infrastructure Fund. He said it is intended to provide a financing mechanism for Kenya’s transformation agenda, including food security initiatives and the expansion of modern transport and logistics infrastructure.
The CS told the court that the fund would also support the scaling up of energy generation to drive industrialisation and growth in the digital economy.
Mr Mbadi added that the Cabinet had resolved that the fund would operate under clear governance, transparency and accountability frameworks, supervised by a competitively recruited board of directors and chief executive officer to ensure prudent investment and fiscal discipline.
“I am aware that the intended corporate structure of the entity is designed to enhance efficiency, transparency, accountability, commercial discipline, and long-term financial sustainability in the financing, development, and delivery of public infrastructure projects of national importance,” the CS said in an affidavit filed in court.
Mr Mbadi further disclosed that the entity is expected to mobilise more than Sh5 trillion and operate as a limited liability company.
“The incorporation of the entity does not in any way diminish its public character, constitutional accountability, or statutory oversight, but rather provides an appropriate and robust legal framework for the transparent, efficient, and responsible management of public resources in line with sound corporate governance principles,” he said.
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