Authorities in Kenya have set an ambitious target to set aside 30 percent of all earnings from mineral and petroleum reserves for the country's future generations in a bold move that seeks to weak the nation from decades old dependence on debt and bilateral financing.

This follows the signing of the Sovereign Wealth Fund Act, 2026 by President Ruto on Wednesday, that operationalizes a savings fund primarily financed by earnings from the country's natural wealth.

Sovereign Wealth Fund Act is poised to establish a framework for managing earnings from Kenya's mining sector, with authorities seeking to channel the revenue into strategic growth projects.

The new law directs authorities to set aside 30 percent of all revenue from mineral and petroleum and deposit it in new savings plan dubbed Future Generations Fund.

"The Sovereign Wealth Fund serves as a guarantee that revenues from petroleum and other valuable mineral resources are not entirely consumed by the present generation but are invested to benefit our children and the children of our children," explained President Ruto.

He added: "Under the law, 30 percent of revenues from petroleum and mineral resources will be channeled into the Urithi Fund, with the remainder supporting economic stability and strategic investments."

Long-term savings

Kenya's Future Generations Fund is structured to establish long-term savings, and hopefully offer alternative source of income in the event the natural wealth is exhausted to finance development projects.

Additionally, the Sovereign Wealth Fund Act also established a stabilization fund and strategic infrastructure fund. The former is modelled to help protect the country's economy from major crises such as pandemics, global financial shocks, and commodity price swings in the international markets.

On its part, the strategic infrastructure fund, is poised to finance key national investments aligned to Kenya's growth blueprint while strategically tapping private capital to accelerate the completion of mega projects.

The new law seeks to ward off abuse by stipulating that the funds collected will not be channeled into speculative financial derivatives, commodities, artworks, real estate projects in Kenya or any securities issued by entities domiciled within the country. 

Additionally, the Act prohibits investment of the funds in unlisted securities or private equity initiatives as part of measures to reduce financial risk and ably preserve the country's wealth for future generations.

In terms of oversight, the Act states that the National Assembly will be required to approve all the fund's investment policies before they are rolled out.

What's more officials found guilty of misappropriation of funds, or those caught diverting assets unlawfully will face legal penalties.

"Under the law, 30 per cent of revenues from petroleum and mineral resources will be channeled into the Urithi Fund, with the remainder supporting economic stability and strategic investments," noted Dr. Ruto.

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