Budget Controller Warns of Oversight Gaps in Proposed Wealth Fund

The Controller of Budget has raised concerns regarding the Sovereign Wealth Fund Bill, warning that the proposed legislation could undermine the constitutional safeguards governing public money.

Margaret Nyakang’o pointed to a disconnect between the fund and the Consolidated Fund, which serves as the primary account for government revenue. Without a clear link, the office warned that oversight mechanisms would be significantly weakened.

Nyakang’o argued that all money flows related to the fund should pass through Parliament first. This requirement is intended to ensure that the legislature maintains its role in controlling national resources and monitoring how they are allocated.

The structure of the fund’s leadership also came under scrutiny. The Controller of Budget noted that the Board, as currently envisioned, remains vulnerable to executive influence. Such a setup could compromise the independence of investment decisions.

There are further worries about the flexibility granted to those managing the assets. The investment rules are currently considered too broad, and the Controller of Budget has called for the introduction of clear, rigid limits to prevent the misuse of funds.

The Bill currently allows the Cabinet Secretary to approve withdrawals. Nyakang’o insists that this power should rest with Parliament to prevent unilateral decision-making by the executive branch.

Critics of the Bill suggest that without these amendments, the fund could become a vehicle for spending that bypasses the usual transparency requirements of the national budget.

The Sovereign Wealth Fund is intended to manage royalties from natural resources and other state revenues for future generations. However, the current fiscal climate in Kenya has led to increased sensitivity over how such large pools of capital are governed.

Legislators are expected to review these objections as the Bill moves through the parliamentary stages. The focus remains on whether the government will tighten the language to satisfy the oversight office.

The Controller’s findings highlight a recurring tension in Kenyan governance between the need for agile investment vehicles and the constitutional requirement for strict parliamentary oversight.

If the recommendations are adopted, the Bill would require significant redrafting to align with the Public Finance Management Act. This would include specific clauses on how surpluses are identified and moved into the fund.

For now, the push for a more controlled investment framework remains a priority for the budget office, which continues to flag risks of fiscal indiscipline in new financial structures.