The High Court has declined to freeze the government’s Sh5 trillion National Infrastructure Fund (NIF), saying a blanket suspension would interfere with executive functions and ongoing public interest projects.
Justice Patricia Nyaundi, however, ordered the Treasury to disclose certified accounts and regularly report all deposits, withdrawals and allocations pending the determination of a constitutional petition challenging NIF’s legality.
The court found the petition raises arguable constitutional questions over the fund’s legal framework but held that a blanket suspension would not strike the proper balance between constitutional oversight and ongoing public functions.
It directed the Treasury to file accounts certified by the Auditor-General within 30 days or August 24, showing money received since the start of the fund, the dates when deposits were made into Central Bank of Kenya or commercial bank accounts operated as well as every transaction, expenditure and allocation.
The government will continue filing transaction reports in court every three months from November 30 until the petition is determined, says the ruling.
About Sh20 billion from an initial public offering (IPO) of shares in Kenya Pipeline Company (KPC) and another Sh244 billion from Safaricom stake sale were earmarked as seed capital for the fund.
The fund is supposed to invest in roads, irrigation projects, energy-generation plants and the country’s main airport, without increasing public debt.
The creation of the fund, which was established under the National Infrastructure Fund Act, 2026, has been challenged for lack of public participation and lack of proof on how Parliament will oversee it.
The petitioners argue that it could receive proceeds from the sale of strategic public assets outside ordinary budgetary controls.
“The issues raised touching on the constitutionality of the statutory framework, the scope of legislative authority and the alleged derogation from constitutional safeguards are neither frivolous nor insubstantial,” she said.
“They present bona fide questions that properly fall within the court’s mandate to interrogate the constitutionality of legislation.”
The petition was filed by four Kenyans led by a Nakuru-based consultant surgeon, Dr Magare Gikenyi Benjamin.
“A national public fund cannot be established under any other statutory regime, including as a limited liability company under the Companies Act,” say the petitioners in their court filings.
They further contend that “Parliament must approve the establishment of a national public fund as well as ongoing oversight of the operations of such a fund.”
The petition also questioned whether the fund complied with constitutional provisions on the distribution of functions between national and county governments, management of public finances, the Controller of Budget’s oversight role and Parliament’s constitutional responsibilities.
The government opposed the application to suspend the fund, arguing that the Act is constitutionally safe and that it has already started work.
The law provides for the fund to be managed by an independent board and a competitively recruited chief executive, with the board responsible for overseeing investments and operations.
Recently, the Treasury advertised the position of the chief executive after Cabinet Secretary John Mbadi appointed six members to the board for three-year terms effective July 8.
The government said the proceeds from the sale of the government’s 65 percent stake in KPC had already been deposited in the fund and that proceeds from the sale of the State’s 15 percent ownership in Safaricom are set to be received.
It argued that interim orders could not reverse actions already taken.
Justice Nyaundi agreed that the court was not required to determine the merits of the constitutional challenge at the early stage of the litigation.
However, she found that continued implementation of the statutory framework without interim safeguards could undermine the effectiveness of any eventual judgment.
“The statutory scheme at issue contemplates ongoing and substantial financial transactions, some of which have already occurred and others that are imminent,” said the court.
“If those processes continue unchecked while constitutional questions remain unresolved, the petitioners’ challenge may be overtaken by events,” it added.
Even so, the court declined to halt the law’s operation.
“The balance of convenience does not favour a blanket prohibition. Rather, it favours ensuring that any ongoing activities of the fund are conducted transparently within public view and subject to constitutional safeguards,” the court said.
The court directed parties to prepare the petition for hearing after the respondents file outstanding responses and any supplementary affidavits.
