Inside Nyakang'o's trouble with Infrastructure Fund Bill

Controller of Budget Margaret Nyakang’o says the Infrastructure Fund is not established under Section 24 of the Public Finance Management Act (Cap 412) but as a corporate entity. [File, Standard]

The Controller of Budget (CoB) has raised concerns over several clauses in the National Infrastructure Fund Bill, 2026, and proposed amendments to align it with the Constitution and other laws.

In a presentation to the National Assembly Committee on Finance and National Planning during a stakeholder engagement forum, CoB Margaret Nyakang’o said the Fund is not established under Section 24 of the Public Finance Management Act (Cap 412) but as a corporate entity. Consequently, the exclusion under Article 206(1)(a) of the Constitution does not apply.

Nyakang’o, who was not physically present, submitted a soft-copy memorandum on Wednesday, arguing that the Bill raises concerns regarding oversight by her office, as well as the treatment of withdrawals and expenditure.

She noted that according to the Bill, directors are appointed by the Cabinet Secretary through a Gazette notice, while independent directors are to be recruited competitively in accordance with the Government-Owned Enterprises Act.

Nyakang’o also cited Clause 8(1)(f), which disqualifies any person affiliated with an organisation receiving significant funding from the Fund from being appointed as an independent director.

“There is a need to clarify what constitutes ‘affiliation’ and the threshold for ‘significant’ financing. Further, affiliation to a political party should be amended to apply only where a person holds an official position,” Nyakang’o submitted.

She observed that Clause 11 sets out the functions of the board, including mobilising resources, approving annual budgets, entering into contracts, establishing risk governance systems, and evaluating the Chief Executive Officer.

However, the CoB argued that risk management is a core function of any board and that the clause should be amended to expressly provide for it as a board responsibility.

She also proposed that the tenure of the Chief Executive Officer be revised from four years to five.

The CoB further recommended that the remuneration of directors be determined by the Salaries and Remuneration Commission (SRC), rather than by the Cabinet Secretary through guidelines, as proposed in the Bill.

“While the governance structure mirrors that of a State corporation, the Bill does not expressly state whether the Fund is subject to the State Corporations Act. Clarification may be necessary to avoid regulatory ambiguity,” Nyakang’o said.

Among other concerns, she cited a provision allowing the Cabinet Secretary to designate a person as administrator of the Fund. She noted that the Public Finance Management Act is couched in mandatory terms, requiring the Cabinet Secretary to designate an administrator for a public fund.

Nyakang’o also pointed out that the Cabinet Secretary is empowered to issue government support measures, including guarantees, letters of credit, partial risk guarantees and political risk insurance. She warned that such instruments carry fiscal implications and may create contingent liabilities for the government.

“The Bill does not expressly provide for parliamentary approval of guarantees as required under Article 211 of the Constitution and the Public Finance Management Act, nor does it provide for the recording and reporting of contingent liabilities,” she said.

She called for alignment of the Bill with Section 50 of the Public Finance Management Act regarding public debt and the issuance of guarantees. She also noted that the Bill does not expressly provide for the submission of quarterly and annual reports to the Controller of Budget.

Given the constitutional mandate of the CoB to report on budget implementation, she proposed that the Bill be amended to compel the Fund administrator to submit quarterly reports to her office.