High Court Directs Tracking of Privatisation Cash in Infrastructure Fund

The High Court has declined to freeze the National Infrastructure Fund (NIF), ruling that a blanket suspension would interfere with executive functions and halt ongoing public interest projects across the country.

Justice Patricia Nyaundi found that while constitutional questions regarding the fund's legal framework exist, stopping operations entirely would fail to strike a proper balance between constitutional oversight and government duties.

Instead of halting the five trillion shilling kitty, the court ordered the National Treasury to disclose certified accounts. The State must regularly report all deposits, withdrawals, and allocations.

This continuous financial disclosure regime aims to maintain judicial oversight over proceeds generated from state asset sales. These include the proposed privatisation transactions involving Kenya Pipeline Company (KPC) and share disposals in Safaricom PLC.

A legal challenge brought forward by Katiba Institute raised concerns over public finance management and constitutional compliance. The petitioner argued that the National Infrastructure Fund Act raises significant issues regarding transparency and the lawful handling of public resources.

The National Treasury had argued against suspending the framework, stating that freezing the fund would compromise long-term capital mobilization for national priority developments. State officials intend to use proceeds from state-owned enterprises to fund major public works while reducing direct reliance on commercial borrowing.

Under the court order, the National Treasury, the Attorney-General (AG), and accounting officers involved in managing the fund must submit detailed financial statements to the court. These reports will track incoming cash flows from privatisation programs to ensure funds are not misallocated while the main petition is heard.

Justice Patricia Nyaundi scheduled further directions on the constitutional petition, emphasizing that the interim orders allowing the fund to function do not prevent the court from declaring the underlying legal framework unconstitutional if the petitioners succeed.

Government plans to divest stakes in commercial entities have drawn close scrutiny from civil society groups and legal experts, who demand full public accounting of all revenue earned. The National Infrastructure Fund (NIF) remains operational under these reporting terms as the substantive suit proceeds.