Lawmakers in the National Assembly are demanding greater control over the use of securitised government revenues, stressing the need for transparency in financing major infrastructure projects and settling pending supplier bills.
With commitments currently pegged at Sh80.48 billion annually, MPs want Parliament to play a central role in monitoring these funds to prevent hidden fiscal risks.
Securitisation allows specific revenue streams to be reserved as collateral for lenders who fund government projects. This method is currently applied to initiatives such as the Standard Gauge Railway extension and clearing outstanding payments in the roads sector.
The National Assembly Public Debt and Privatisation Committee on Monday warned that relying heavily on these alternative funding methods may obscure shortages in conventional financing sources, including external loans, while increasing future fiscal exposure.
The committee emphasized that all securitisation activities should be openly disclosed and integrated into debt management planning.
“The committee recommends that all securitisation and commitment of public money be subjected to transparent disclosure and parliamentary oversight, including publication of the fiscal implications of these commitments to the future debt sustainability,” the committee stated.
It added: “The committee observed that declining concessional financing, alongside increased reliance on alternative approaches such as PPPs and securitisation, may mask underlying external financing constraints while creating additional contingent and fiscal risks that require transparent disclosure and integration into fiscal risk management.”
Currently, Kenya dedicates Sh12 out of every Sh25 collected from the Road Maintenance Levy Fund (RMLF) to settle pending obligations in the roads sector. Plans are also underway to allocate 90 percent of the Railway Development Levy to extend the SGR from Naivasha.
Last June, the National Treasury revealed that the Cabinet approved the Kenya Roads Board to direct Sh12 from the RMLF per litre towards investors in two major bonds.
The Kenya Roads Board is set to issue a Sh175 billion roads bond, refinancing a bridge facility previously extended by commercial banks including the Trade and Development Bank, KCB Bank Kenya, Absa Bank Kenya, and UBA Kenya Bank. These loans helped the government clear arrears owed to road contractors.
The roads agency is also considering a second Sh125 billion bond, where investors would be repaid from Sh5 per litre of fuel collected under the RMLF to cater for future sector arrears.
Motorists contribute Sh25 per litre of petrol or diesel to the RMLF, with Sh12 already committed to securitisation. Based on average monthly petrol and diesel consumption between September 2024 and September 2025, the securitised funds are expected to total about Sh47 billion per year, according to Kenya National Bureau data.
MPs are pushing for these commitments to be fully disclosed and incorporated into national debt planning to ensure the country’s finances remain sustainable and accountable.
