Kenya: National Infrastructure Fund to Tap Private Capital, Not New Taxes - Ndii

Nairobi — The government will not introduce new taxes to finance the National Infrastructure Fund (NIF), Presidential Council of Economic Advisers Chairman David Ndii has said.

According to Ndii, the fund will be capitalized through privatization proceeds rather than levies or budget allocations.

Ndii said the NIF is designed to ease fiscal pressure on the national budget while sustaining Kenya's infrastructure rollout at a time when the government is tightening spending through austerity and fiscal consolidation measures.

"The National Infrastructure Fund is in our manifesto, and it is very clear that we were going to capitalize it using privatization proceeds. So, it is not going to be capitalized using tax or levies," Ndii said.

He explained that the model allows the government to "take infrastructure off-budget" by channelling private capital from the sale of state assets into commercially viable projects, instead of relying on tax-funded spending.

"It is only good that if you sell an asset, you should use that money to fund other assets."

Ndii asserted that the fund will "enable government to take commercially viable infrastructure outside of the budget and reduce the fiscal burden.

The economist noted that progress on the fund had been delayed due to court cases that stalled Kenya's privatisation programme, but that the process had now been "unlocked", paving the way for implementation.

Ndii also dismissed claims that government projects were being financed outside the approved budget framework, saying Kenya's public finance system is solid and bound by strict oversight mechanisms.

The NIF forms part of the Kenya Kwanza administration's strategy to attract private investment into large-scale infrastructure spanning transport, energy, and water while easing pressure on public debt and taxation.

Last month, President William Ruto outlined plans to establish both a Sovereign Wealth Fund and an Infrastructure Fund, the latter focused on financing reliable energy for industry, building dams to boost food security and irrigation, and expanding road networks to enhance national and regional connectivity.

Read the original article on Capital FM.