PS Omollo defends newly enacted Sovereign Wealth Fund Act

Principal Secretary for Internal Security and National Administration Raymond Omollo has defended the newly enacted Sovereign Wealth Fund Act, saying the legislation will ensure revenues generated from Kenya's natural resources are preserved and invested for the benefit of both current and future generations.

Speaking during a women empowerment forum in Gem, Siaya County, on Saturday, Omollo said the law, recently assented to by President William Ruto, creates a legal framework for managing income from the country's natural resources in a transparent and accountable manner.

"For many years, Kenya has exploited natural resources without a comprehensive mechanism to preserve part of the proceeds for future generations," Omollo said. "The President has now made this a reality."

The Principal Secretary said the fund is expected to invest a portion of revenues earned from natural resources instead of allowing all proceeds to be spent immediately, arguing that the approach would help secure long-term national prosperity.

His remarks come days after President Ruto signed the Sovereign Wealth Fund Bill into law following its passage by Parliament.

The legislation establishes Kenya's first sovereign wealth fund, joining a growing number of countries that use such funds to save surplus revenues and invest for long-term economic stability.

A sovereign wealth fund is a state-owned investment fund that typically accumulates revenues from natural resources, budget surpluses or proceeds from strategic state assets and invests them to generate returns over time.

Countries such as Norway, Botswana and the United Arab Emirates operate sovereign wealth funds that finance development, cushion economies during downturns and preserve wealth for future generations.

Kenya's new law seeks to establish a similar framework, with the government arguing that the fund will help safeguard wealth generated from the country's natural resources while promoting fiscal sustainability and intergenerational equity.

The Act also places restrictions on where the fund can invest, prohibiting investments considered high-risk, including speculative derivatives, private equity, unlisted assets, locally issued securities and real estate within Kenya.

The restrictions are intended to protect public wealth from excessive investment risk.

Omollo said the legal framework would strengthen transparency and accountability in managing natural resource revenues while improving investor confidence.

He added that attracting private investment remained critical to accelerating economic growth and creating employment opportunities, saying investments in natural resources should translate into improved livelihoods and better public services for host communities.

While the government says the Sovereign Wealth Fund will promote prudent management of national wealth, its implementation is expected to attract close scrutiny from economists, civil society and Parliament, particularly regarding governance, transparency and the sources of capital that will finance the fund.

Analysts have previously argued that the success of sovereign wealth funds depends largely on strong governance, political independence and clear accountability mechanisms to ensure the funds serve long-term national interests rather than short-term political priorities.