NG-CDF Declared Unconstitutional

The Fund’s operations set to wind down in June 2026

👋 Welcome to The Mwango Weekly by Mwango Capital, a newsletter that brings you a summary of key capital markets and business news items from East Africa.

This week, we cover the declaration of the National Government Constituencies Fund Act 2015 as unconstitutional by High Court bench, August 2024 revenue highlights, and Bamburi Cement’s KES 18.25 special dividend.

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Landmark Ruling Declares NG-CDF Unconstitutional

NG-CDF Struck Down: In the week, a 3-judge bench of the High Court delivered its judgment on petition 178/2016 putting Wanjiru Gikonyo & Another vs. the National Assembly of Kenya. The bench ruled that the National Government Constituencies Development Fund (NG-CDF) Act 2015 was unconstitutional with the Fund’s operations set to wind down in June 2026.

“For all the above reasons and conclusions, we now make the following declarations and orders. One, that the National Government Constituencies Development Fund Act of 2015 as amended in 2022 and 2023 is hereby declared unconstitutional. Two, that the  National Government Constituencies Development Fund and all its projects, programs and activities shall cease to operate at the stroke of midnight on 30th June 2026. That this petition having been filed in the public interest, each party shall bear its own costs. That’s the judgment of the court.”

High Court Bench

Background, Mandate, and Projects: The NG-CDF was established under the NG-Act 2015 and it operates programs at the constituency level aimed at socio-economic development. The Fund is managed by a committee at the constituency level chaired by the Member of Parliament (MP), and at the national level, the NG-CDF Board oversees budget operations and directs policy on behalf of the National Treasury and Planning Ministry.

The Fund is distributed across the 290 constituencies nationwide, and it engages in projects that are within the functions of the national government while staying away from those under the devolved units. In a majority of the constituencies, the Fund implements programs in the education sector to increase primary to secondary school enrollment, construction of educational amenities like laboratories and classrooms, and the outright payment of tuition fees to low-income students. 

New University Funding Model Taskforce: President William Ruto has appointed a 129-member National Committee to review the new university funding model. The committee will have four sub-committees focusing on different aspects of the funding model, including the review and refinement of the model for universities and TVETs, appeals on student categorization for scholarships and loans, the structure of student loans, and the cost of university academic programs. Chaired by Prof. Japheth Micheni Ntiba, the committee will serve for eight weeks, with its secretariat located at the Ministry of Education Headquarters at Jogoo House. Separately, just within the education funding context, the President highlighted last month that consolidation of all public bursaries in the country is a topic he is ready to engage in.

“Why, how do we consolidate all bursaries? The ones for the Member of County Assembly, Member of Parliament, Women Representative, Governor. I agree with you that it is a positive proposition. It is something that we need to have a conversation about. It is something that I will engage governors about because in our Constitution, once money has been given to the counties, I have no authority as President to decide for the counties but I think a national conversation that consolidates all these bursaries and then we see how far it can go towards making our education affordable is a very positive conversation. I am ready to engage in that conversation and provide leadership in that conversation.”

President of Kenya, William Samoei Ruto

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August 2024 Revenue Highlights