THE proposed sovereign wealth fund for Kenya should have an initial start-up capital of Sh10 billion, the presidential taskforce on parastatals has recommended.
The fund will be funded mainly from capital increases from privatisation proceeds and surplus foreign exchange reserves as well as dividends from public enterprises. A key funding source for the fund will be expected returns from oil, gas and minerals.
According to the report, the purpose of the the fund is to r oll out local renewable energy schemes, fund restoration and rehabilitation of excavated areas and support government savings from mineral revenues to ensure sustainable and stable future incomes.
The fund will also help to ease economic stress through stabilisation and strengthen the nation' s long term financial position and finance expenditure on public pensions.
"The primary goal for establishing Kenya's Sovereign Wealth Fund is to achieve the policy objective of securing an income from current resources for future generation," the report says.
Additional objectives for Kenya's Sovereign Wealth Fund appear to include supporting the fiscal budget through transfers to National Government budgets (with approval of Parliament) from Sovereign Wealth Fund investments (domestic and international, the report adds.
"These objectives are expected to change over time with the onset of sustained exploitation and production of natural resources from recent discoveries in oil and gas, coal, titanium, aoda ash, rare earth elements and other natural resources endowments," it says.