Kenya: OAG Raises Concerns Over Oversight, Borrowing in Infrastructure Fund

26 February 2026
Capital FM (Nairobi)
By Phidel Kizito

Nairobi — The Office of the Auditor-General (AoG) has flagged wide-ranging legal, governance and constitutional gaps in the proposed National Infrastructure Fund Bill, warning that the draft law could weaken oversight of public resources if passed without substantial amendments.

Appearing before the National Assembly Departmental Committee on Finance and National Planning on February 24, Auditor-General Nancy Gathungu urged lawmakers to realign the Bill with existing public finance and procurement laws.

"As I conclude, it is my expectation that the feedback provided in this Stakeholder Engagement will provide valuable insights for Parliament's consideration on the National Infrastructure Fund Bill, 2026," she said.

"I urge the Committee to consider the proposed amendments to ensure that the Fund is aligned to other laws already enacted by Parliament and is supported by effective oversight mechanisms that uphold the constitutional principles of public finance and the national values of transparency and accountability, equity and equality."

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The National Infrastructure Fund Bill seeks to establish a vehicle to mobilize and deploy capital for large-scale infrastructure projects.

However, the auditor-general warned that Clause 5 empowers the Fund to borrow without explicit alignment to Article 206 of the Constitution of Kenya and the Public Finance Management Act, potentially creating loopholes in debt oversight.

Clause 6 on the Board's composition requires redesign to include non-independent directors with expertise in infrastructure development, in addition to the Principal Secretary to the National Treasury.

Under Clause 12, the Board is granted authority to invest through equity and debt and to surrender or dispose of assets but without clear safeguards such as competitive bidding or public auction as required under the Public Procurement and Asset Disposal Act.

Clause 13 vests directors' remuneration in the Treasury Cabinet Secretary without reference to the Salaries and Remuneration Commission.

Clause 21 grants broad investment policy powers without referencing the Investment Promotion Act, risking overlap with the National Investment Council.

Clause 24 could duplicate procurement standards already set in law, while Clause 33 bypasses the Controller of Budget's constitutional mandate to authorize withdrawals.

The Auditor-General called for tighter safeguards to protect transparency, accountability and prudent management of infrastructure financing.

Read the original article on Capital FM.

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