Motorists will pay for decades as the Treasury securitizes the road maintenance fund to plug a gaping budget hole.

The government has found a new way to borrow money without calling it a loan. In a move that has fiscal analysts raising the alarm, the State is finalizing a plan to securitize an additional Sh5 per liter of the Road Maintenance Levy Fund (RMLF), aiming to raise a staggering Sh120 billion upfront. It is a financial sleight of hand: taking tomorrow’s revenue to pay today’s bills, leaving the future hollowed out.

Robbing Peter to Pay Paul

The Road Maintenance Levy was designed for exactly that—maintenance. It is the fund that fills potholes and recarpets highways. By securitizing it—essentially selling the rights to future collections to a Special Purpose Vehicle (SPV) in exchange for cash now—the government is diverting money meant for road repairs into debt repayment and new mega-projects.

“This is not free money,” warns a former Treasury official. “This is a loan with a different name.And the collateral is the road network. If we spend the maintenance money on paying bondholders, who will pay to fix the roads when the rains come?”

The Debt Trap Deepens

The target is to raise Sh175 billion in total bonds, with Sh120 billion coming from this new tranche. The justification is the clearing of pending bills—the billions owed to Chinese and local contractors who have downed tools across the country. But critics argue this is a vicious cycle. We borrow to build, we fail to pay, we borrow against our maintenance fund to pay the builders, and the roads crumble in the meantime.

• The Cost at the Pump: While the levy itself may not technically rise, the rigid commitment to pay bondholders removes any flexibility to lower fuel taxes in the future. Motorists are locked into high prices.
• The Constitutional Question: Lawyer Kiroko Ndegwa and others have challenged the legality of this move, arguing it bypasses parliamentary oversight on public debt limits. It is "off-balance-sheet" financing that hides the true extent of the country’s liabilities.
• The Shadow of the IMF: This securitization aligns perfectly with IMF conditions to "mobilize domestic resources." It is a technical term for squeezing the citizen until the pips squeak.

A Legacy of Debt

As the deal closes, the immediate crisis of stalled roads may be solved. But the long-term cost is immense. We are eating the seed corn. By 2027, a significant chunk of every liter of petrol purchased will not go to the state, or to the roads, but to the investors who bought these bonds. The road ahead is paved, but we do not own it.