Ruto Okays New Law Setting Aside Billions in Oil and Mineral Wealth for Future Generations

Jukwaa

🇰🇪 Breaking It Down

The new law creates Kenya's first Sovereign Wealth Fund, aimed at helping the country manage resource wealth, cushion the economy against major shocks, and finance strategic infrastructure projects, while preserving part of the proceeds from natural resources for future generations.

Under the Act, 30 per cent of the total mineral and petroleum revenues collected by the government will be ringfenced under the Future Generations Fund.

The allocation is intended to ensure that the benefits of exploiting the country's natural resources are shared between current and future generations.

📌 What You Need to Know

According to the law, the Future Generations Fund will build long-term national savings, generate an alternative source of income once mineral and petroleum resources are depleted, and support capital development projects during periods of declining resource revenues.

The legislation also establishes a Stabilisation Fund, which will provide the national government with financial resources to respond to extraordinary economic shocks that could threaten macroeconomic stability.

The Act cites events such as the COVID-19 pandemic and global disruptions to oil supplies caused by international conflicts as examples of the kinds of crises the Stabilisation Fund is expected to help the country navigate.

A third component, the Strategic Infrastructure Investment Fund, will provide financing for priority infrastructure projects that align with Kenya's national development plans and leverage private-sector investment.

To safeguard public resources, the law introduces strict investment rules governing how the funds can be managed.

It prohibits investments in speculative derivatives, unlisted securities, real estate located in Kenya, private equity, art, commodities and securities issued by Kenyan entities.

📰 Source: Kenyans.co.ke

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