CoB seeks strict control of Sovereign Fund

Controller of Budget Margaret Nyakang’o before the National Assembly Public Debt and Privatisation Committee, March 30, 2026. [Boniface Okendo, Standard]

The Controller of Budget (CoB) and Office of the Auditor General (OAG) have called for firmer safeguards for the proposed Sovereign Wealth Fund (SWF) to protect the integrity of its management.

The SWF Bill 2026 seeks to provide a legal framework for the establishment and management of the Sovereign Wealth Fund and, if enacted, the Bill will provide a strategic framework to transform Kenya’s natural resources wealth into long-term financial resilience by establishing a tripartite structure: stabilisation, infrastructure, and future generations components. 

It also provides a framework for commitment to intergenerational equity, ensuring that the proceeds from non-renewable resources are invested in diversified global assets to benefit future citizens.

The proposed law, sponsored by the Leader of the Majority Party of the National Assembly, was published on March 9 and read for the first time on March 11 and subsequently committed to the Departmental Committee on Finance and National Planning for its consideration and tabling.

But during a stakeholder engagement session with the committee yesterday, CoB Margaret Nyakang’o raised concerns over some of the clauses, including the fact that the clause on sources of funding does not specify whether revenues flow through the Consolidated Fund before being credited to SWF.

Nyakang’o said Article 206(1) of the Constitution requires all money raised by the national government to be paid into the Consolidated Fund unless expressly excluded by an act of Parliament.

“All revenues must first be paid into the Consolidated Fund and transferred to the SWF by Parliamentary appropriation consistent with Article 206. Any statutory exclusion from the Consolidated Fund requirement must be expressly and constitutionally justified in the Bill,” she told the Committee.

On the governance and management clause, Nyakang’o said there is no provision for independent oversight representation at the board level.

Similarly, she said the board is not expressly accountable to Parliament through CoB’s reporting framework and the appointment process lacks adequate safeguards against executive capture.

“Designate a non-voting CoB observer at all board meetings and require the board to account to Parliament through CoB’s budget implementation reports under Article 228(6). All board appointments must be subject to a competitive, transparent process with Parliamentary approval,” she said.

Nyakang’o said she was also concerned over the investment clause of the Bill, which she said the mandate grants discretion to the board and the Cabinet Secretary, adding that mineral and petroleum revenues are finite and non-renewable, thus poor investment decisions are irreversible.

Auditor General Nancy Gathungu also expressed concern about the clause on the source of funds providing unlimited discretion by gazette notice.

“Create controls by having an independent board, which will provide recommendations as the basis of decisions by the CS and incorporate a requirement for the National Assembly’s approval of new revenue resources,” said Gathungu.

She also noted the absence of a clear allocation formula.