Treasury denies claims government plans to borrow Sh1 trillion from sacco savings for infrastructure fund

The National Treasury has strongly dismissed claims that the government plans to borrow over Sh1 trillion from sacco savings to finance the National Infrastructure Fund, terming the reports as false and misleading.

In a statement issued on Monday, July 6, the Treasury also rejected a widely circulated graphic of Cabinet Secretary John Mbadi, clarifying that he never made the remarks attributed to him.

"We wish to clarify that the information circulating on social media regarding the Government borrowing sacco savings for the National Infrastructure Fund is entirely fake and malicious," a statement from the Treasury said.

The fake quote alleged that the government intended to borrow more than Sh1 trillion from sacco savings to fund roads and other development projects through the National Infrastructure Fund, with the plan linked to the forthcoming Cooperatives Bill.

Treasury CS John Mbadi also dismissed the circulating claims, saying they were fabricated and urging the public to rely only on official government communication channels for accurate information.

"My attention has been drawn to some false information doing the rounds, claiming GOK intends to borrow money from sacco to fund projects through NIF. It's maliciously choreographed to misinform the public, taint govt and elicit public uproar," warned Mbadi.

The controversy comes amid heightened public interest in the Kenya Cooperatives Bill, which is being fast-tracked by the government and is expected to be signed into law by President William Ruto within a month.

Announced during the 104th Ushirika Day celebrations, the Bill seeks to overhaul and modernise Kenya’s cooperative and sacco sector, creating a strengthened legal framework to protect over Sh1 trillion in member deposits and regulate operations across a 14-million-member movement.

On the National Infrastructure Fund, the government has already secured Sh345 billion in seed capital raised domestically through public-private partnerships, according to official statements.

This includes over Sh100 billion generated from the partial sale of the Kenya Pipeline Company, with the aim of financing strategic infrastructure projects without relying on external borrowing.

Deputy President Kithure Kindiki has previously said the government is also targeting sacco expansion and digital modernisation, even as it explores leveraging pooled savings for national development.

The Cooperatives Bill and the sacco Societies Amendment Bill also propose improved governance, faster digital adoption, and the creation of a Deposit Insurance Fund to safeguard members’ contributions.

DP Kindiki further noted that the government intends to increase funding for infrastructure by reallocating budgetary resources from selected projects into the National Infrastructure Fund.

"When I say that I have an idea where we will get more money, it is because I know that we are going to create a bit of fiscal space in the budget by offloading some of the projects that are budgeted for, infrastructural projects that can now go into the National Infrastructure Fund and be funded from that fund and therefore we will have a little more leeway and fiscal space to fund key sectors, including the cooperatives sector," stated DP Kindiki.