The Kenyan government reduced outstanding road sector liabilities by KSh68.59bn, bringing the State Department for Roads’ pending bills down to KSh98.17bn for the financial year that ended in June.
This decline represents a 23.5 per cent fall from the peak of KSh166.76bn recorded in 2023/24 and follows a KSh30.19bn reduction in the year to June after a KSh38.40bn cut in the previous financial year, together amounting to a 41.1 per cent decrease from the peak backlog.
The department credited the securitisation of the Road Maintenance Levy Fund for the improvement, stating “Securitisation of the Road Maintenance Levy Fund (RMLF)…enabled the settlement of pending payment certificates and accelerated the implementation of road projects,” in a budgetary report to the Treasury.
Under the securitisation arrangement the state commits part of future fuel-levy receipts to investors, using those cash flows to raise financing that settles historic road obligations.
The road maintenance levy was raised from KSh18 to KSh25 per litre of petrol and diesel in July 2024. In April 2025 the government earmarked KSh7 of each KSh25 litre to raise KSh175bn through bridge loans and bonds, and in November 2025 an additional KSh5 per litre increased the commitment to KSh12 per litre.
The money generated has been used to repay financing secured against future levy income, allowing some old bills to be cleared without relying solely on annual budget allocations, although the approach reduces the share of levy income available for other road needs.
President William Ruto announced in March that the RMLF securitisation bond would be launched and listed on the Nairobi Securities Exchange within 2026. He said “In the course of this year [2026], we will be bringing to the market the road maintenance levy fund securitisation bond, which has enabled us to settle the pending bills crisis that had stalled road projects everywhere in Kenya,” and added “The RMLF has raised for us KSh175 billion, and we will be bringing it here (to the Nairobi Securities Exchange) so people can trade it as well.”
The planned bond is intended to refinance part of the estimated KSh175bn in bank loans used to clear historic road sector debts accumulated up to December 2024, with investors to be repaid from future levy collections.
Despite the reduction in arrears, road construction activity has slowed, with 2,089.25 kilometres built in the three years to June 2026 compared with 3,805 kilometres in the preceding three-year period, a drop of 1,715.75 kilometres or 45.1 per cent.
The remaining KSh98.17bn in pending bills continues to pressure contractors, many of whom have abandoned projects or face the risk of asset auction.
The cabinet, chaired by President Ruto, recently approved payment of 28,726 verified claims totalling KSh23.74bn, covering liabilities of KSh50m and below.
