The Sh5tr blind spot: No visibility as billions disappear through government funds

‎Controller of Budget (COB) Dr Margaret Nyakang'o makes her submissions before the Committee on Finance and National Planning Chaired by Molo MP Kimani Kuria.[Elvis Ogina, Standard]

Controller of Budget Margaret Nyakang'o has said her office has no visibility over billions of shillings collected through key government funds and levies, including the National Infrastructure Fund and the Sovereign Wealth Fund, renewing fears about transparency in the Ruto administration's multibillion-shilling financial vehicles.

Speaking on Citizen TV, Nyakang'o said the Office of the Controller of Budget (CoB) cannot track how money collected through these standalone funds is spent because they operate outside the Consolidated Fund, the government's central account.

"No visibility at all. Anything called a fund or a levy, we will not see it, are not part of the Consolidated Fund," she said.

Her remarks, which come amid growing scrutiny of Kenya's public finances, highlight a widening oversight gap as President William Ruto's administration creates and restructures multiple funds and levies to finance its development agenda.

Under Article 228 of the Constitution, the Controller of Budget is mandated to authorise withdrawals from the Consolidated Fund, the Equalisation Fund and the County Revenue Fund after confirming that withdrawals are lawful.

But funds established outside this framework are governed by independent legal instruments that do not route day-to-day spending through her office.

"What do we mean by transfers? In that they will ask for a block of funds to go and do something. So I approve it as a lump sum," Nyakang'o said.

The obscured collections include the Affordable Housing Levy, the Social Health Insurance Fund (SHIF), the Petroleum Levy, the Railway Development Levy, the Hustler Fund, the Uwezo Fund, the Sovereign Wealth Fund and the Sh5 trillion National Infrastructure Fund, according to the CoB.

"Many times, I have felt that we have gone out of the safeguards the Constitution has provided," she said. "For instance, why don't they have a reporting mechanism whereby the reports are scrutinised?"

She also raised concerns about the use of public resources for political activities ahead of the 2027 general election.

"As we move towards the election, there is quite some expenditure that you cannot account for. There is also use of public resources, motor vehicles, human resources used for partisan events, so we are likely to record higher spending than before," she noted.

President Ruto has defended the creation of the National Infrastructure Fund and the Sovereign Wealth Fund as essential tools for financing Kenya's development while protecting future generations from unsustainable debt.

"We will do this without crushing taxpayers and without saddling our children with unsustainable debt," Ruto said in his New Year address.

"The National Infrastructure Fund and the Sovereign Wealth Fund have been established to help finance ambitious development programmes while protecting future generations from unsustainable debt."

Speaking at the signing of the National Infrastructure Fund Bill into law in March 2026, Ruto rejected criticism that the fund was a gamble.

"Let me emphasise that the National Infrastructure Fund is not an experiment. It is a model that has been adopted successfully around the world," he said, citing similar funds in Nigeria, Ghana, India, Canada, the United Kingdom and South Africa.

The fund aims to mobilise Sh5 trillion over the next decade to finance roads, railways, ports, energy and irrigation projects.

The government says it will leverage the fund's capital at least 12 times to mobilise up to Sh1.2 trillion, with an initial Sh20 billion allocated to the expansion of Jomo Kenyatta International Airport.

When he signed the Sovereign Wealth Fund Bill into law in July 2026, Ruto said the fund is anchored on three pillars: the Urithi Fund, which reserves 30 per cent of petroleum and mineral revenues for future generations; the Stabilisation Fund, a financial buffer against economic shocks; and the National Infrastructure Fund.

The law reserves 30 per cent of Kenya's petroleum and mineral revenues for future generations.

"The Act provides for independent professional management, strong parliamentary oversight, transparent public reporting, and robust auditing," Ruto said. "Every shilling must be accounted for. Every decision must be guided by prudence. Every investment must be measured by the legacy it leaves for future generations."

Opposition leaders had earlier questioned the structure and governance of both funds, arguing they bypass constitutional safeguards.

Wiper Party leader Kalonzo Musyoka criticised the "alternative financing mechanisms" as contradicting constitutional principles, emphasising transparency, parliamentary oversight and equitable distribution of fiscal responsibilities across generations.

"Ruto's push for 'alternative financing mechanisms' flies in the face of a Constitution that deliberately anchors public finance in transparency, parliamentary oversight, and the fair distribution of burdens across generations," Kalonzo said.

"By seeking to bypass these guardrails in pursuit of a Sh5 trillion so-called national transformation project, he is attempting to erode the very pillars of fiscal prudence and democratic accountability."

Kiharu MP Ndindi Nyoro, a former National Assembly Budget Committee chairperson, opposed the plan to establish the National Infrastructure Fund through a corporate structure, terming it a "rubberstamped project."

"Who will be the directors of the new company to be formed? Who will select them? There is everything wrong with these hasty ideas," Nyoro said.

Governance experts has earlier questioned the accountability framework.

Even before the funds were operationalised, financial experts warned that the draft Sovereign Wealth Fund Bill lacked adequate governance safeguards.

Deepak Dave, a risk and credit analyst at Autonomi Capital, told The Standard that the concept of a sovereign wealth fund may be inappropriate for Kenya's economic situation.

"The creation of a sovereign wealth fund is a luxury for rich countries or those whose economies cannot bear an outsized windfall of resource revenue. That is patently not true of Kenya," Dave said.

"The revenues that will go into this nebulous initiative are far better dealt with as a windfall distribution to wananchi below a certain income threshold, or a national programme to massively upscale education and health infrastructure."

A clause-by-clause analysis revealed that Clause 8(3)(c), which initially suggested a commitment to "provide at least ten per cent savings for future generations," lacks any definition of what this percentage refers to. Clause 11(7) fails to specify which measure of nominal GDP should be used to determine the threshold at which transfers to the Stabilisation Component cease.

Dave also criticised the board composition, which includes a chairperson appointed by the President, the Principal Secretary for the Treasury, the Central Bank governor, and four members appointed by the Cabinet Secretary.

"I see there is no discretion for the board to refuse the transfer. And nothing about notification to Parliament?" Dave noted, pointing to a significant oversight in legislative oversight.

Nyakang'o herself raised similar concerns during stakeholder engagement on the Sovereign Wealth Fund Bill, calling for all revenues to flow through the Consolidated Fund first.

"All revenues must first be paid into the Consolidated Fund and transferred to the SWF by Parliamentary appropriation consistent with Article 206," she told the National Assembly's Finance and National Planning Committee.

"Any statutory exclusion from the Consolidated Fund requirement must be expressly and constitutionally justified in the Bill."

The funds have also faced legal challenges. The High Court issued orders barring the government from establishing the National Infrastructure Fund pending a hearing, with petitioners including the Consumers Federation of Kenya and the Katiba Institute challenging the law on six constitutional grounds, one of them being that it bypasses Parliament's ordinary oversight of government borrowing.

In an affidavit filed in a constitutional petition, Nyakang'o accused the Treasury of designing the National Infrastructure Fund to escape her oversight, reducing her approval role to a "rubber stamp."

MPs also rejected a proposal by Nyakang'o to place all operations of the proposed Sovereign Wealth Fund under her oversight, raising fresh concerns about accountability in the management of the multi-billion-shilling kitty.

Civil society groups under the Okoa Uchumi Campaign have called for Parliament to halt the Sovereign Wealth Fund Bill, citing a lack of public participation and arguing that the Bill lacks binding safeguards against politically motivated withdrawals.

"Citizens cannot be asked to tighten their belts while Parliament simultaneously creates opaque financial vehicles with weak accountability safeguards," the groups said in a joint statement.

As Kenya's public debt crosses the Sh13 trillion mark, equivalent to 67.8 per cent of GDP, well above the statutory ceiling of 55 per cent, the revelations by the Controller of Budget raise fundamental questions about who is accountable for billions of shillings collected from Kenyan taxpayers.