Mbadi: National Infrastructure Fund to Ease Pressure on Budget
The Treasury CS said the government had identified projects with the potential to generate commercial returns, making them suitable for financing through partnerships with private investors.
Treasury Cabinet Secretary John Mbadi defends the government's plan to use the proposed National Infrastructure Fund to finance commercially viable projects, saying rising public debt has left the national budget with limited room to support major infrastructure investments. Photo: Economic Planning Development Kenya.
By Robert Mutasi
Treasury Cabinet Secretary John Mbadi has defended the government’s plan to use the proposed National Infrastructure Fund to finance commercially viable projects, saying rising public debt has left the national budget with limited room to support major infrastructure investments.
Speaking to journalists at The Eldoret National Polytechnic on Friday, Mbadi said the government had been forced to explore alternative financing arrangements as it seeks to fund development projects without placing additional pressure on the ordinary budget.
He said the National Infrastructure Fund would bring together government-backed projects and private capital to finance infrastructure outside the conventional budget process.
“At the point we have reached with our budget, our finances and debt levels, the debts have become a little bit unsustainable,” Mbadi said, explaining the rationale behind the proposed funding model.
The Treasury CS said the government had identified projects with the potential to generate commercial returns, making them suitable for financing through partnerships with private investors.
Among the projects he cited were Jomo Kenyatta International Airport, the Nairobi-Mombasa highway, the Nairobi-Namanga road, and several energy projects involving power generation and transmission lines.
Mbadi said the National Infrastructure Fund was already working on Jomo Kenyatta International Airport and the Nairobi-Mombasa highway, with additional projects expected to be considered.
He explained that the approach would allow the government to combine public resources with private investment to support projects that might otherwise struggle to secure adequate funding through the annual budget.
The Cabinet Secretary, however, clarified that the new funding arrangement would operate alongside the existing public-private partnership (PPP) framework.
“That does not mean that PPP is dead. PPP is also working parallel to the National Infrastructure Fund,” he said.
According to Mbadi, the central objective is to reduce the financial burden on the national budget while ensuring that essential infrastructure projects continue to move forward.
The proposed model comes as the government faces competing demands for public resources, including infrastructure development and other national priorities.
Mbadi’s remarks point to a growing reliance on alternative financing mechanisms to address funding gaps while managing debt pressures.
The Treasury CS also addressed concerns over reported Ebola cases in Kenya, urging the public to remain calm and assuring citizens that the government was prepared to respond to any health emergency.
Mbadi said the reported cases did not amount to an outbreak, arguing that the infections had been traced to neighbouring countries.
“There is no outbreak of Ebola. These are isolated cases,” he said, adding that the government had the necessary systems to respond to any threat to public health.
He warned that excessive public alarm could hurt tourism by discouraging visitors from travelling to Kenya, insisting that the country remained safe and that the government was prepared to handle emerging health concerns.
Mbadi further welcomed Kenya’s position in an International Monetary Fund (IMF)-related ranking of African economies, saying the country’s economic performance reflected resilience and improved macroeconomic stability.
He said Kenya ranked seventh in Africa, behind South Africa, Egypt, Nigeria, Algeria, Morocco and Angola, while Ethiopia was placed eighth.
According to the CS, Kenya’s performance reflected progress in managing the economy compared with the period between 2020 and 2021, when the country trailed Ethiopia significantly.
He attributed the improvement to the growth of the economy, adequate foreign exchange reserves and greater stability in the macroeconomic environment.
Mbadi said the country’s position had strengthened its appeal as an investment destination, noting that Kenya remained the largest economy in East and Central Africa.
However, he cautioned against celebrating the ranking before more progress had been achieved.
“My target is to have Kenya at least number five in Africa. That is where we belong,” he said.
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