Thank you very much. Please let's take our seats, asante sana. Your excellencies, distinguished leaders, ladies and gentlemen, good morning and welcome to this, in my opinion, very consequential ceremony this morning. There are moments in the life of a nation when history is recorded not in years but in months. In March this year, Kenya changed how it will finance its development to build the assets of the future through the National Infrastructure Fund that we brought into force. Today, Kenya changes again how it will preserve its wealth and its future. Today we enshrine in law the institution that will ensure that the prosperity of those assets we create endures for generations, and that is the National Sovereign Wealth Fund. Let me state the principle plainly because everything I say after this flows from it. If the National Infrastructure Fund builds the assets that grow our nation, the Sovereign Wealth Fund preserves and multiplies the wealth the assets create.
I know there was a question asked to the panelists. I must congratulate all the panelists who spoke here for their candor in explaining to us from their perspective, from the private sector perspective, what they see in what we are doing as government. And the question was: we have the National Infrastructure Fund, now we have the Sovereign Wealth Fund. What is the difference and what is the connection? In my very simple understanding, the National Infrastructure Fund builds our present. You know very well that we have many projects, critical infrastructure that we are desirous of building as a nation. But on the other hand, we have limited resources on how to deliver on these very critical infrastructure projects. The National Infrastructure Fund creates the bridge between the infrastructure projects that we need for our growth and the resources that will unlock the capital for us to implement these projects. I will give you an example. We've just signed the contract for the Jomo Kenyatta International Airport. It's going to be a 150 billion shilling project. We cannot build that project using our budget because it's heavy. So, we will not borrow and we will not add additional taxes. What is going to happen is that we're going to use 20 billion shillings of the money we raised under our National Infrastructure Fund to crowd in the balance of the money from the private sector. That is how innovation works in the transformation of a nation. That is why in our midst here we have fund managers, we have different investors, we have banks who are looking at the opportunity, pension funds who are looking at the opportunity to invest in Jomo Kenyatta International Airport. That is what NIF is going to do.
But the Sovereign Wealth Fund will connect the investment we are making in Jomo Kenyatta to the future generations. Because apart from benefiting from resources that will come from our natural resources in oil and minerals, we will also be investing profits that come from investment in our very critical infrastructure like Jomo Kenyatta in the Sovereign Wealth Fund, so that Lynn here and Ronny and the young ones that came to witness this signing can have a portion of the investments we are making today for their future. So this is the connection that we are making between the present and the future.
These are not isolated milestones. They are successive chapters in the deliberate transformation of our republic. Over the past three years, the bottom-up economic transformation agenda has restored stability, rebuilt confidence, strengthened our economy, and laid the foundations for sustained inclusive growth. With those foundations in place, we now transform how Kenya finances development, mobilizing domestic savings and private capital to build the assets of the future. But financing development is only half the journey. Today we ask a different question. What do we do with the wealth, the assets we are building today and the natural resources we are unlocking today? What are we doing about the future? Do we use it all in our lifetime or do we preserve part of it so that future generations inherit not just what we found but the prosperity we created out of what we found? Our constitution answers that question long before we do. Article 201(c) provides that, and I quote, 'The burdens and benefits of the use of resources and of public borrowing shall be shared equitably between present and future generations.' End of quote. This is far more than a principle of public finance. It is a constitutional covenant between generations. Today, through the Sovereign Wealth Fund, we give practical effect to that constitutional promise in front of our children.
Natural resources are different from taxation or ordinary economic production. They are finite by their nature. Once a barrel of oil is extracted, it can never be extracted again. Once a mineral deposit has been exhausted, it is gone forever. If one generation consumes all the proceeds from exhaustible resources, it leaves nothing but empty mines and depleted oil fields for those who come after. That is neither prudent economics nor responsible stewardship. Around the world, history offers powerful lessons. Kuwait began the journey in 1953. But perhaps the best known example is Norway, as has been stated here, which I had the privilege of visiting a few weeks ago, and I sat across the table with a minister who was present 30 years ago when they started their sovereign wealth fund. And I had a real eyeball-to-eyeball conversation because I knew that shortly I will be signing Kenya's Sovereign Wealth Fund. And just imagine what has happened in one generation. Norway has done something phenomenal. In one generation, in 30 years, they have built the world's largest sovereign wealth fund. $2 trillion. $2.2 trillion. Almost 80 trillion Kenya shillings. I mean in just 30 years. So when I tell our good citizens that we can be a first world country in one generation, it is possible.
If anybody had any doubt in their mind what is achievable with focus, courage and determination, look at what Norway has done. Rather than consume all the wealth generated from its North Sea oil, Norway chose to invest for the future. Today, as I have said, its sovereign wealth fund is worth $2.2 trillion. It owns about 1.5% of all listed companies in the world, with investments in more than 7,200 companies across the globe, including Equity Bank right here at home. 14% in James's own words. That is how transformation works. That is the power of disciplined investing and long-term thinking. Closer home, Botswana, again as has been said here, built the Pula Fund. Pula means rain. In a dry land like Botswana, setting up a reserve is not an indulgence. It is a survival strategy. Rwanda has done the same. Many other countries have done so.
Today, Kenya proudly joins that community of nations that saves while they build. The lesson from each of these nations is unmistakable. Natural resources create opportunity. Institutions determine destiny. Without the right institutions, even great national natural wealth can become a missed opportunity. Economists call this the resource curse. I dare say they give it the wrong name. The curse is not the resources. The curse is the failure in stewardship. Kenya has learned this lesson through experience. For many years, Kenya extracted titanium from the mineral sands of Kwale. It was one of the largest mining investments in our country's history. The minerals were extracted. Those deposits can never be mined again. What answer shall we give one day to our children when they ask us what happened to titanium? That is why this legislation that today becomes law in Kenya is consequential. So that never again will we mine or use resources without a trace for the future generations.
Kenya is expected, and you have heard from Paul Russo, to commence oil production from the Lokichar basin in Turkana. For decades that discovery has represented hope. Today it also represents responsibility. The question before us is not simply whether Kenya will produce oil. The question is whether Kenya will manage the proceeds wisely. Every barrel extracted should become an asset that never runs dry. At the same time, we have completed the first comprehensive nationwide mineral survey in our country's history. That survey has confirmed what many suspected for years: that Kenya is endowed with significant deposits of strategic, critical and industrial minerals.
Governance, transparency and accountability at its very heart. The Sovereign Wealth Fund will belong not to my administration but to the Republic of Kenya. It will be managed according to the law, our constitution and the enduring interests of the Kenyan people. The act provides for independent professional management, strong parliamentary oversight and transparent public reporting and robust auditing. Every shilling must be accounted for. Every decision must be guided by prudence. Every investment must be measured by the legacy it leaves for future generations.
Ladies and gentlemen, history seldom remembers nations for resources they possessed. It remembers them for the choices they made with those resources. The nations that achieve lasting prosperity share one defining characteristic. They think beyond the present. They plan in decades, not election cycles. They build institutions that endure across administrations and across generations. Permit me to express my appreciation that today Kenya chooses... Sorry. Sorry. Yes. Sorry. History, as I said, seldom remembers nations for resources they possessed. It remembers them for the choices they made in the use of those resources. The nations that achieve lasting prosperity share one defining characteristic. They think beyond the present. They plan in decades, not in election cycles, and they build institutions that endure beyond administrations and across generations.
Permit me to express my appreciation to the National Assembly and the Senate for the diligence, patriotism and sense of national purpose with which they have passed this legislation. [applause] You have not merely passed laws. You have laid the legislative foundations of a transformation that will outlive every one of us. History will remember you not as the parliament that debated Kenya's future, but one that legislated it into being.
These laws will strengthen our financial system, modernize our economy and lay foundations upon which future generations will continue to build. Today, Kenya chooses that discipline. We choose to save, to invest, to preserve, to build, and above all, we choose to honor the constitutional covenant that binds one generation to the next. The question history will ask us is not what we inherited, but what we bequeathed the next generation.
And I want to appreciate the leadership of the speaker, the speakers of both houses, the people of Kenya who came with ideas, the private sector players who informed the public participation, and the bipartisan engagement in parliament. It went beyond sides. [applause] The entire house came together to build consensus on what we do with our present as we focus and connect it to the future. I must say I appreciate parliament's role in the last three years. The speaker said here very eloquently what we have managed to achieve in the space around our economy and the transformation that we have undertaken: from the housing fund, through the social health insurance fund, to the primary health fund, to the emergency fund, to all the other transformational legislation, from government-owned enterprises, privatization act, national infrastructure fund, now sovereign wealth fund, and all the other pieces of legislation that have been undertaken by parliament.
Every proposal we have taken to parliament has been subjected to the people's views in public participation, to parliamentary debate, and strengthened in the process. And we can proudly say today: while three years ago we were staring at a default. While three years ago I sat in room six here with my very able team, to which I am very grateful, and we had dollar reserves of just two and a half months of import cover, about $5.7 billion. Today, sitting in our midst here is our governor. Our foreign exchange reserves are going now to maybe seven months of import cover. [applause]
I think just yesterday or the day before, you know, we are almost tripling our foreign exchange reserves in Kenya. That is extraordinary. And I want to thank these great men and women who have assisted me in putting this together with a lot of courage and with a lot of focus. Numbers are beginning to show. Just yesterday or is it the day before, UNCTAD released their report and Kenya has increased its foreign direct investment from $1.5 billion three years ago to $3.2 billion today. [applause]
I have asked the deputy president to chair the government committee that is going to work with private sector investors and players for what will be one of the largest investments in our country: the investment in the East African oil refinery, a 2.2 trillion shilling investment in our country. [applause] And we have already set a date for the groundbreaking, just for your information.
So we are taking steps in making sure that we take our country. When we say we are moving this country to a first world status, we want to match our commitment with our actions. May history record that we honor the trust placed in our generation not by exhausting our nation's resources but by preserving, growing and expanding them. May future generations look upon this moment — and representatives of that future generation are here with us this morning — and say they did not consume our inheritance. They secured it. They did not merely govern for their time. They governed for us as well. God bless you all. God bless Kenya. And I wish you all the very best this moment. Asante. [applause]
And to all our friends who have come here. I know there are many actors. My good friend Tades from TDB Bank here. Our good friends from IFC are here, from the World Bank here, our good friend from AfDB here. All the good people... I see the new chairman of the Nairobi Stock Exchange or Securities Exchange here, Mr. Mulwa, and the immediate former is here, and many other people who are here. I see many fund managers. I see many pension fund people here. Many people from the banks. If there was a moment we are discussing real money, this is the moment. And we are discussing it with the right people.
And I am very confident about the economic future of our country. I think the more we pull together, the more we understand what we are doing. Listening to all the captains of our financial institutions here, from the pension funds all the way to the banks, it gives me a lot of confidence that we are now in sync: that the future of our nation is not just in the hands of government, it is in the hands of our society; that the private sector is as much part of the discussion about the governance of our country and the future of our country as it is the responsibility and business of every citizen of our republic; that our children, Lynn and Ronny representing them here, are also part of the conversation about our country and about our future.
It's a very proud moment for me as we take these steps, consequential historic steps of taking our country to the next level. I see people from the insurance industry and all the other players, and when I listen to what they are saying about deepening their financial markets... I have been to the Nairobi Securities Exchange five times. Not because I have no work to do. I have been there intentionally to give confidence that we believe in the capital markets as a source — [applause] — as an alternative source of capital for us to transform our country.
I must commend the capital markets. They have helped us fund Talanta Railing Stadium. They are helping us fund Bombers of Kenya. The creative and innovative structuring of opportunities for us to be able to undertake some of our very consequential infrastructure projects, from Ronimo Summit to all the other programs, has been a partnership between government and the private sector.
And I want to commend the private sector for stepping forward, being as courageous as us, because in the past the private sector were very shy. Today we are very bold people, and I want to commend you. I don't take your participation, your partnership for granted. It is making a difference in our country, and this is the kind of collaboration and partnership between private sector actors, banks, pension funds, capital markets, investors coming together so that we can build a nation.
Listen, often the public is stranded with big projects that require funding, and the private sector on the other side is always stranded with a lot of money not knowing where to invest. I am happy that we are now building the ecosystem that enables private sector resources to fund public assets in a win-win outcome. That ecosystem is what is going to make a difference in our country. It is innovative. It builds on all our strengths. What the government can do best, let government do. What the private sector can do best, the private sector should. And that is why it was necessary for us to change the privatization act.
It was also necessary for us to amend the law on public-private partnerships so that we can get more private sector actors into the public space. I am very happy that this morning we are here. It is a very proud moment for me, and that we are making the right steps taking our country into the future. I want to give you my assurance that under my administration we will work with all actors. We will work together in a way that brings the whole nation together.
I must thank the political class. I want to commend the honorable Buru Adinga, now the leader of ODM, for coming together under the broad-based arrangement. Today John B is providing leadership that has never been witnessed. [applause] I can confirm to you, John, that when I write my book you will have ample space on what you and I have discussed, and your team at the Treasury, of course including all the other actors that have taken this to the future.
I also must commend the leader of majority who is here, and our members in parliament, members of the finance committee, all the members. They've been... I remember on, I think it was Wednesday last week, and I was out of the country. I'd gone to attend the graduation of my daughter, and discussions in parliament went up to midnight. Consultations outside the official space in parliament, and I was with Lawrence there, and he was in consultation. They were on a call with parliament, and finally parliament came together in a very bipartisan way and said we must move the country forward.
I commend them and thank you very much, Kimani, for your leadership, the chair of finance committee for his leadership, and all the other actors. I don't take it for granted because I know what it means. We have tried to do this as a country for many years. It has not happened. Not because others did not try, not because they didn't want to do it. But it couldn't, it didn't come together. We have...
