A legal challenge has put the proposed National Infrastructure Fund on hold after the High Court issued conservatory orders stopping its rollout until a constitutional petition is heard and determined.
The decision halts all actions related to the fund as the court considers claims that its creation may have breached the Constitution.
In orders issued on December 24, 2025, Milimani High Court Judge Bahati Mwamuye barred the government and listed respondents, including the Office of the Auditor-General and the Office of the Controller of Budget, from taking any steps to operationalise the fund.
“Pending the inter parties hearing and determination of the Petitioners/Applicants’ Notice of Motion Application dated 16/12/2025, a conservatory order be and is hereby issued restraining the Respondents, jointly and severally, and whether directly or through their employees, servants, agents, or related entities; from establishing, incorporating, registering, operationalising, funding, or howsoever otherwise giving effect to the impugned National Infrastructure Fund,” Justice Mwamuye stated.
The ruling prevents the establishment, registration, incorporation, and financing of the fund until the matter is resolved.
Petitioners Challenge Fund’s Legality
The case was brought by the Consumers Federation of Kenya (COFEK) together with petitioners Dr Margaret Gikenyi, J. Benjamin, Eliud Matindi and two others.
They argue that the fund was introduced through a State House communication instead of legislation passed by Parliament, which they say is the only lawful way to set up a public fund.
The petitioners warn that allowing the fund to proceed without legislation would weaken constitutional rules governing public money, amount to executive overreach, and erode safeguards meant to protect public finances.
Concerns Over “Shadow Treasury” Structure
Objections were also raised to the plan to register the fund as a Limited Liability Company. Petitioners argue this would move trillions of shillings outside parliamentary scrutiny and beyond the Auditor-General’s audit mandate, creating what they describe as a “shadow treasury.”
The petition highlights risks around transparency, public participation, and financial control if the fund operates under the proposed structure.
Opposition has also emerged over plans to use National Social Security Fund (NSSF) savings as seed capital. Critics, including Kiharu MP Ndindi Nyoro, argue that workers’ pension contributions cannot legally be redirected to infrastructure projects without parliamentary approval, warning such investments could endanger retirement savings.
Court Timelines and Next Steps
The court directed the petitioners to serve all respondents and interested parties with the court papers and orders by December 29, 2025, and to submit proof of service.
- Respondents and interested parties must file their responses by January 9, 2026.
- Petitioners may file rejoinders and written submissions by January 14, 2026.
- Respondents’ submissions are due by January 16, 2026.
The matter will be heard on January 20, 2026, via virtual proceedings, where parties will briefly highlight their submissions.
Government’s Position on the Fund
The government has defended the National Infrastructure Fund, describing it as a key driver of Kenya’s economic transformation.
President William Ruto said the fund was designed to reduce reliance on debt by drawing private capital from pension funds, insurance firms, and sovereign wealth funds. He noted that “each shilling of public money is expected to attract up to ten shillings in private investment.”
Before the court freeze, the fund was expected to finance major projects in agriculture, transport, and energy, including mega dams, expanded road and rail systems, extension of the Standard Gauge Railway to the Ugandan border, and the addition of 10,000 megawatts of renewable energy.
