Kenyan President William Ruto today enacted the Sovereign Fund Act, which will create a fund to which 30% of the country’s oil and mineral revenues will be allocated for the benefit of the “future generations”.
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” O Today marks a turning point in how Kenya will preserve its resources for future generations,” Ruto said in a speech during the ceremony at the State House in Nairobi, quoted by local media.
” Natural resources are finite and, once exhausted, disappear forever. That is why we do not want a generation to benefit at the expense of those who will come next,” he added, stressing that the new sovereign fund “will preserve and increase the wealth of the country for the future”.
The President highlighted studies across the country that confirmed the existence of important mineral deposits in Kenyan soil, and justified the creation of this fund “before the temptation to waste these resources” arises.
The new law establishes three distinct structures: the Urithi Fund (which means inheritance or legacy in Swahili), to which 30% of revenue will be allocated; the Stabilisation Fund, which aims to create a financial reserve against “external crises”, such as the Iran-Iraq War or the covid-19 pandemic; and the National Infrastructure Fund, to “create national assets”.
Ruto also noted that Kenya was inspired by the Norwegian Sovereign Fund for this initiative, which invests the Nordic country’s oil and gas revenue abroad and is considered the world’s largest sovereign fund.
“Kenya can also become a first-world country in a single generation,” he said.
The law also establishes governance frameworks for fund management and restrictions on the types of investments for which it can be used, as well as accountability mechanisms to ensure transparency and supervision of the use of public resources.