Kenya’s plan to raise about $38 billion for infrastructure development is gaining attention as a bold example of how African countries can fund their growth by leveraging domestic resources, reducing dependence on foreign aid and external borrowing while strengthening economic independence.
According to businessday, the strategy centres on the creation of a National Infrastructure Fund backed by legislation designed to attract domestic investors such as pension funds, retail investors and private equity firms into large-scale projects including roads, dams and urban transport systems.
According to Eric Gumbo, a partner at G&A Advocates LLP, the initiative represents a shift in how African economies could approach development financing.
“For decades, African development has often depended on external loans and aid. But the key challenge is not a lack of global capital. It is the shortage of investable projects and the legal certainty investors require,” Gumbo told BusinessDay.
Africa’s infrastructure financing gap is estimated at between $68 billion and $108 billion annually, according to the African Development Bank. Many projects struggle to attract private funding due to regulatory uncertainty, policy changes and perceived sovereign risk.
Kenya’s framework aims to address those concerns by creating a legal and financial structure that helps absorb some of the risks that typically discourage investors. By improving transparency and aligning incentives between the government and private sector, the system is expected to make long-term infrastructure investments more viable.
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The model is also designed to broaden participation in national development by allowing local investors to own stakes in critical infrastructure. Recent efforts to list a majority share of the Kenya Pipeline Company on the Nairobi Securities Exchange, targeting about 100 billion shillings, reflect that direction.
Supporters say such initiatives could deepen local capital markets and strengthen public trust in long-term development programmes.
Kenya is also exploring the creation of a sovereign wealth fund with an intergenerational focus, aimed at converting resource revenues and national savings into future infrastructure investment.
Gumbo said the success of the plan will depend on strong governance, transparency and consistent legal protections that reassure investors over time.
He noted that stronger infrastructure investment can significantly boost economic growth by improving transport networks, energy supply and access to services.
If the framework proves effective, it could influence policy thinking across the continent as governments search for sustainable ways to finance development while managing rising debt levels.
