The IMF reported that, as of today, sovereign wealth funds manage assets worth more than 2.07 quadrillion KSh worldwide, whereas in 2008 this figure was around 387 trillion KSh. The organization noted that these funds have changed: while previously they were mainly used as tools for budget stabilization, they have now become major investors in infrastructure, technology, private capital, and real estate. The IMF emphasized that governments are increasingly relying on sovereign wealth funds to preserve national wealth, enhance economic resilience, and support long‑term development goals amid growing geopolitical uncertainty. The IMF’s observations were published a few weeks after Kenya adopted the Sovereign Wealth Fund Act. President William Ruto signed the law on July 8, 2026, thereby creating a legal framework for the management, investment, and preservation of revenues derived from natural resources, including oil revenues, royalties from mineral extraction, income from government investments in resource enterprises, and other approved sources.
The Secretary of State for Home Affairs, Raymond Omolo, stated that the law addresses a long‑standing gap in the country’s natural resource management system. «The President has made this a reality. As a country, we must ensure that the wealth generated by our natural resources benefits our people today while also securing the future for generations to come», he said. The law provides for three components of the fund: a stabilization component to mitigate the impact of income fluctuations on the economy, a component of strategic infrastructure investments to finance national development projects, and a «Future Generations» (Urithi) component to preserve wealth for future generations. At least 10% of the fund’s resources will be allocated to the Urithi component. All revenues will initially be credited to a holding account at the Central Bank of Kenya before being distributed. The law also prohibits the use of the fund as collateral or for lending and limits investments to approved financial instruments.
The IMF calls for strengthened governance. The IMF stated that sovereign wealth funds need clearly defined legal mandates to ensure accountability and guide investment decisions. It was noted that countries choose different models depending on national priorities. Resource‑exporting states often create stabilization funds, while more affluent economies focus on long‑term savings. Other countries use sovereign funds to finance infrastructure and promote economic diversification. The IMF recommended that countries pursuing multiple goals consider the possibility of legally separating different tasks through separate funds or distinct sub‑funds in order to improve the quality of management and operational transparency. The fund cited as examples Nigeria’s Sovereign Investment Authority, which operates separate stabilization, future‑generations, and infrastructure funds, as well as Norway’s Global Pension Fund, which functions as a long‑term savings fund within a sustainable budgetary system.
Clear legal frameworks remain necessary. The IMF noted that governance issues should be enshrined in law through clearly defined powers, mandatory fiduciary duties, transparent reporting, and effective oversight. The organization added that operational independence should be supported by legal norms regulating the deposit of funds, their withdrawal, and accountability to parliament and society. The IMF pointed out that the Santiago Principles, developed in 2008 with the support of the fund, remain an important foundation for the management of sovereign wealth funds. However, modern investment practices, including direct investments, private capital, unlisted shares, and joint ventures, require a more robust legal framework and more targeted management mechanisms. The IMF has emphasized that stable legal structures help ensure that the activities of sovereign wealth funds align with national interests, while simultaneously supporting budgetary discipline, public accountability, and long‑term financial stability.
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