'Public funds not enough': Treasury CS Mbadi rallies support for public-private partnerships to close infrastructure gap

National Treasury Cabinet Secretary John Mbadi on Monday rallied Kenyans to support President William Ruto’s administration in embracing the use of private investors in executing national public projects.

Mbadi, who was speaking during the Public-Private Partnerships (PPPs) Symposium in Nairobi in an event attended by top government officials, including partners from the public and private sectors, said Kenyans must acknowledge the reality that public resources alone are not enough to meet the country’s growing infrastructure demands.

“The fiscal space is limited, yet the needs are urgent — from energy and transport, to housing, health and digital connectivity. With Kenya’s borrowing space narrowing, we must adopt innovative, sustainable financing mechanisms to meet these development needs,” said Mbadi.

A strong supporter of Public-Private Partnerships, Mbadi had at one time expressed frustration with Kenyans after public pressure made the government cancel deals it had struck jointly with Adani, an Indian company that was to modernise the Jomo Kenyatta International Airport.

Mbadi explained that the government requires an estimated Sh560 billion annually to develop and maintain our infrastructure. Despite this need, it currently only spends approximately Sh224 billion per year on infrastructure, resulting in a shortfall of about Sh336 billion annually.

“Through PPPs, we not only access private sector capital, but also benefit from the efficiency, innovation, and risk management capacity inherent in private sector operations,” Mbadi explained.

According to him, this approach will enable the government to continue delivering large-scale infrastructure projects - traditionally financed through public debt - while freeing up public resources for essential social sectors such as health, education, and water. “In this way, PPP is not merely a financing tool – but a catalyst for sustainable development, allowing us to build modern, resilient infrastructure for current and future generations.”

“I am glad to note that Kenya is ready for PPP as an investment option. The country’s GDP is currently estimated at $124 billion while its installed energy capacity is 3,243MW, including 79 per cent renewable energy,” said Mbadi.

He announced that they have established a robust legal and regulatory framework through the enactment of the PPP Act, 2021. This legislation enables private sector participation in the financing, construction, development, operation, and maintenance of infrastructure across various sectors, through a range of contractual models.

“Consequently, Kenya has developed a strong pipeline of active PPP projects at various stages of development, underscoring its seriousness in leveraging private sector efficiency and capital. To complement this framework, we enacted the Nairobi International Financial Centre Act, which provides a legal foundation for positioning Nairobi as a competitive financial hub,” explained Mbadi.

The matter of openness in Public-Private Partnerships has been a thorn in the flesh for the government after Kenyans, through protests and court action, demanded transparency and accountability.

Last year, the Senate investigation into the controversial Adani-JKIA takeover deal descended into chaos as senators engaged in heated exchanges with Mbadi, who had appeared to testify before the Transport Committee.

Attempts by the then Committee Chair Karungu wa Thangwa to restore order were met with hostility, prompting him to walk out of the session in protest.

According to the CS, PPP deals would have been vital for JKIA to be upgraded to international standards.

"Rwanda has developed a serious airport, and Ethiopia has an airport. Kenya cannot lag behind. We're losing our competitiveness as a hub," Mbadi remarked.

"Therefore, whether it is Adani or not, we must agree that someone must do our airports. It is not just airports alone, but major projects. Let us not shy away from engaging Kenyans."

Adani, an Indian conglomerate, had fronted a Sh238 billion deal to take over operations at JKIA for 30 years before returning it to the government. The public had, however, criticised the deal, questioning its opaque nature.