By April last year, Kenya‘s pending bills owed to road contractors had reached Sh188 billion, forcing 580 projects to a standstill. The government was pushed into an unusual financing maneuver, pledging future fuel-levy income to raise cash.
The Treasury securitised Sh7 of the Sh25-per-litre Road Maintenance Levy, raising roughly Sh175 billion through the Kenya Roads Board. Over Sh132 billion has been disbursed to KeNHA, KeRRA, and KURA.
Cabinet has approved securitising a further Sh5 per litre to raise an additional Sh120 billion. This means Sh12 of every Sh25 collected at the pump is now committed to debt-servicing rather than routine maintenance.
Securitisation converts a stock problem, accumulated arrears, into a flow constraint on future levy revenue, for a decade or more. Two developments this year have sharpened the risk, including an irregular Sh7.3 billion diversion from the securitised fund.
Treasury has proposed halving the levy allocation to the Road Annuity Fund to ease pump prices, illustrating the political tension between relief-seeking and debt commitments. The Sh68 billion 2026/27 budget provision for verified claims under Sh100 million is a sensible step, but it is a fraction of the Sh636.7 billion in claims catalogued government-wide.
The securitisation programme has restored liquidity and reopened sites for contractors who waited six to nine years for payment. However, for taxpayers and motorists, it has effectively mortgaged a decade of fuel-levy receipts to clean up a procurement and cash-management failure.
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