Petitioners reject CS Mbadi's bid to lift Infrastructure Fund court orders

Four petitioners led by Magare Gikenyi have urged the High Court to reject an attempt by Treasury Cabinet Secretary John Mbadi to lift orders stopping the establishment of the Sh5 trillion National Infrastructure Fund (NIF).

In fresh submissions filed at the Milimani High Court’s Constitutional and Human Rights Division yesterday, the petitioners warned that the government had shown confusion over the legal basis for creating the fund, with different state organs providing contradictory positions.

Central to the petitioners’ opposition is an admission Mbadi a few days ago that despite its name, the National Infrastructure Fund is not actually a public fund as contemplated by Article 206 of the Constitution, despite being designed to finance Kenya’s transformation agenda in food security, transport infrastructure, and energy generation.

In a detailed replying affidavit, Mbadi confirmed to court that the entity would operate as a private limited liability company designed to mobilize over Sh5 trillion, more than Kenya’s entire annual budget of approximately Sh3.9 trillion.

“Though the entity was described as a ‘Fund’, its objects are not those of a ‘Fund’ within the meaning of Article 206 of the Constitution,” Mbadi stated in his affidavit, acknowledging that the government intends to manage massive public resources through a corporate structure rather than constitutional frameworks governing public funds.

Mbadi defended the corporate structure, arguing it would actually enhance rather than diminish accountability.

In submissions signed by second petitioner Eliud Karanja Matindi from the UK, the group warned that Treasury plans to proceed without mandatory approvals if it determines such approval is not constitutionally required.

They added that this conditional approach to seeking parliamentary and public approval has intensified concerns about executive overreach.

“As the 2nd Respondent( CS Treasury Mbadi) has averred once they completes the process to establish the impugned NIF, approval, including from Parliament, will only be sought if it determines such approval is constitutionally or statutorily required,” Matindi stated.

The petitioners highlighted glaring inconsistencies that have emerged in court filings about the government’s understanding of constitutional requirements on the fund.

While Mbadi’s replying affidavit states the NIF will be set up as a limited liability company under the Companies Act, its grounds of opposition claim the legal basis would be Section 24(4) of the Public Finance Management Act (PFMA).

The National Assembly and Senate, however, argue the fund would be established under Article 206(1) of the Constitution and Section 24(4) of PFMA.

“There is clear confusion and lack of clarity about the legal basis for establishment of the impugned NIF between and within two key State organs responsible for ensuring compliance with the Constitution,” the petitioners told the court.

They argued that without continued court intervention, their petition challenging the fund’s constitutionality could be rendered meaningless if Treasury proceeds to establish the entity before the case is determined.

Unlike constitutional funds which are subject to strict parliamentary oversight and constitutional safeguards, this entity will operate as a private limited company, raising serious questions about transparency and accountability.

Gikenyi and his co-petitioners Matindi, Philemon Abuga Nyakundi, and Dishon Keroti Mogire, are challenging the Cabinet’s December 15, 2025 decision to approve the fund’s creation, where Mbadi and Attorney-General Dorcas Oduor jointly presented the proposal.

A confidential Cabinet communication marked “Secret” and signed by Cabinet Secretary Mercy Wanjau filed in court reveals that Cabinet approved establishment of the National Infrastructure Fund PLC and directed the two officials to take necessary action.

They argue that establishing the NIF through executive action violates multiple constitutional provisions including Articles 201, 204, and 206 which govern public finance management, as well as principles of parliamentary oversight and public participation.

In his bid to have the conservatory orders lifted, Mbadi defended the corporate structure, insisting it would enhance rather than diminish accountability.

He outlined oversight mechanisms including audits by the Auditor General and reporting requirements to Parliament, arguing that the incorporation of the entity does not in any way diminish its public character, constitutional accountability, or statutory oversight.