The government’s plan to raise billions through the Road Maintenance Levy has sparked fresh concerns over rising public debt, with critics warning of hidden borrowing that could strain taxpayers and the road sector.
According to a report published by The Standard on Monday, May 11, the National Treasury is preparing to securitise an additional Sh5 from the existing Sh25 fuel levy charged on every litre of petrol and diesel.
The move is expected to raise up to Sh120 billion, adding to Sh175 billion already borrowed against the same levy to settle pending payments to road contractors.
This latest securitisation would bring the total portion of the levy committed to debt obligations to Sh12 per litre, significantly reducing funds available for road maintenance and development.
Analysts argue that while the approach may not immediately increase pump prices, it effectively locks future revenue streams into debt repayment, limiting fiscal flexibility.
Critics have described the plan as “debt by another name,” warning that it could deepen Kenya’s financial obligations at a time when the country’s debt-to-GDP ratio is projected to hit 68.2 percent.
They caution that road agencies and county governments, which depend on the levy for infrastructure upkeep, may face reduced allocations.
Data cited in the report shows that the fuel levy generated Sh119 billion in a single year, underscoring its importance as a key funding source for the road sector.
However, with a funding gap of Sh256 billion, the government appears to be increasingly relying on borrowing mechanisms tied to the levy to bridge the deficit.
While motorists may not feel the impact immediately at fuel stations, experts warn that the long-term effects could include deteriorating road conditions and increased financial pressure on taxpayers.
The growing reliance on securitisation raises questions about sustainability and transparency in public finance management.
The Treasury has yet to provide detailed safeguards to ensure that essential road maintenance is not compromised as more of the levy is redirected toward debt servicing.