The Kenya Association of Manufacturers (KAM) has called for major changes to the proposed National Infrastructure Fund (NIF) Bill, 2026, urging the government to include stronger oversight, private sector representation, and a clear mandate to support industrial growth.
Speaking on behalf of KAM Chief Executive Tobias Alando, Simon Githuku said the Fund is a key step to reduce reliance on public debt but needs reforms to ensure it delivers real economic benefits.
KAM highlighted that Kenya’s manufacturing sector currently contributes only 7.3 per cent to GDP, lagging behind regional competitors like Egypt (13.89 per cent) and South Africa (12.79 per cent), as well as global peers like Vietnam (24.43 per cent). The Association warned that without improved infrastructure, Kenya risks remaining uncompetitive, noting that the country ranks 112th on the UNIDO Competitive Industrial Performance Index.
To make the Fund more effective, KAM proposed that at least 40 per cent of construction materials for Fund-supported projects be sourced locally. The Association also recommended a two-tier governance structure, with a Board of Trustees serving as legal custodians of the Fund’s assets, and a separate Board of Directors overseeing technical investment decisions. According to Githuku, this separation would protect the Fund from being diverted to unrelated government expenses and reduce conflicts of interest.
KAM further called for explicit private sector representation on the Board, pointing out that businesses are among the main beneficiaries of improved infrastructure. Administrative costs, they suggested, should be capped at 0.5 per cent of the Fund, and the Fund’s equity share in projects should be limited to avoid crowding out cheaper commercial financing.
Emphasizing the need to safeguard public resources, the Association proposed that the Fund be ring-fenced, ensuring that all money is spent only on infrastructure projects. They recommended that any misappropriation be punishable by a minimum Sh10 million fine or at least five years in prison.
KAM also raised concerns over Clause 25 of the Bill, which allows the Cabinet Secretary to issue government support measures. They warned that such provisions could create hidden public debt that does not appear on official registers, potentially masking Kenya’s true fiscal exposure.
Finance Committee Chairperson Hon. Kuria Kimani welcomed KAM’s proposals, saying they provide important measures to prevent mismanagement and are similar to safeguards used in the Affordable Housing Fund.
Finally, KAM recommended that all investment plans under the Fund be guided strictly by the Medium-Term Plans (MTPs), which set development priorities for five years and form the basis for County Integrated Development Plans (CIDPs).
The Association said implementing these measures would ensure the National Infrastructure Fund delivers on its promise to boost Kenya’s economic growth, industrial competitiveness, and public service delivery.
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