The Controller of Budget (CoB) Dr Margaret Nyakango, has raised sharp concerns over the Sovereign Wealth Fund(SWF) Bill, 2026, warning that, as currently drafted, it could allow billions in mineral and petroleum revenues to flow outside the country’s main treasury account.
CoB says the fund plan contains critical gaps that could undermine constitutional financial oversight and leave public funds exposed, pointing out its violation of Article 206 of the Constitution.
“This one formally establishes the fund as a body corporate with perpetual succession, a common seal, and the capacity to sue and be sued,” stated Nyakango.
She added, “However, we observed that the clause is silent on the fund’s relationship with the consolidated fund and with the control of budget’s authorization powers under Article 284.”
She notes that Article 206.1 demands that all national government revenues be paid into the Consolidated Fund first, recommending that those revenues pass through that account before being transferred to the Fund through parliamentary appropriation.
In this regard, she reiterates that the real risk that could be posed with this infringement is that the fund will operate as a parallel financial architecture outside the national budget framework, which is unconstitutional.
CoB further argues that the Bill does not make the issue of mineral and petroleum revenues clear, pointing out that it could go directly into the SWF, bypassing Parliament and the Consolidated Fund entirely, which could pose a monumental disaster in the near future.
Beyond the money trail, the office has flagged the Fund’s governance structure inside the Bill that gives the Cabinet Secretary of the National Treasury broad authority over withdrawals, a power the Controller of Budget says should rest with Parliament, not the executive.
“Then the next clause is the one that sets out permissible investment classes, risk management principles and the return objectives of the fund. And we observe that the mandate grants broad discretion to the board and the Cabinet Secretary,” flagged Nyakango.
This in and of itself is alarming as per CoB, citing it as “the most significant accountability gap in the entire Bill,” warning that giving such authority to a Cabinet Secretary without adequate constitutional checks “creates room for financial misuse.”
With these red flags raised, CoB recommended that no withdrawal be made without prior parliamentary appropriation, consistent with Articles 206 and 284 of the Constitution, and that every withdrawal carry express written authorisation from CoB before it is effected.
CoB also raised concerns about the Fund’s board composition, warning that the current appointment process lacks adequate safeguards against executive capture, which could create room for the government to sway board decisions without any independent pushback.
To address this, the office recommends a non-voting independent observer at all board meetings and that all board appointments go through a competitive, transparent process subject to parliamentary approval before any member takes office.
The investment mandate also came under scrutiny, with CoB noting that the Bill grants broad discretion to both the board and the Cabinet Secretary, with no measurable benchmarks, no external review mechanisms and no statutory investment policy prescribed.
This is particularly worrying because mineral and petroleum revenues, which form the bulk of the Fund’s projected income, are finite and non-renewable. Poor investment decisions, the office warned, would be irreversible, with no mechanism to course-correct.
The Controller of Budget is recommending a Statutory Investment Policy Statement approved by Parliament and reviewed every three years, alongside an independent investment advisory committee tasked with monitoring compliance and reporting directly to Parliament.
The office also wants a statutory withdrawal rule capping annual withdrawals as a percentage of the Fund’s total value, a safeguard designed to protect its long-term sustainability against short-term political pressures.
This implies that officers who authorise withdrawals beyond the prescribed limit should face personal, civil and criminal liability in the event of any mishap.
The SWF Bill 2026 is still at the public participation stage after being read for the first time on March 11, 2026-Kenyans.co.ke.