Africa-Press – Kenya. Treasury Cabinet Secretary John Mbadi has delved into the securitising fuel levy debate, strongly defending the move and describing it as a necessary step to revive stalled infrastructure projects.
Speaking on Wednesday, Mbadi dismissed critics of the plan as he declared that the government had no apologies and would continue with it.
“So there is nothing secret about securitisation. Everybody knows it. Where does he live if he doesn’t know that we were securitising this money? And we will continue securitising it. And we have no apologies to make,” Mbadi said.
The CS was responding to Kiharu MP Ndindi Nyoro, who had criticised the move.
The fuel levy, which currently stands at Ksh25 per litre, includes an original Ksh18 dedicated for road maintenance and an additional Ksh7 introduced by the Kenya Kwanza administration.
The treasury boss clarified that the Ksh18 remains untouched and continues to fund routine maintenance, while the additional Ksh7 was being used differently, through a financial model known as securitisation.
“We had a choice. Continue misusing this additional seven shillings on Maram roads that get swept away every rainy season, or use it to get contractors back on the road. We chose the latter,” Mbadi explained.
According to Mbadi, by securitising the Ksh7 portion of the levy, the government has already raised over Ksh60 billion, with a target of Ksh175 billion. Mbadi explained that this money is being used to pay contractors and resume road projects.
“If you securitise this money, and by the way, we have already received over Ksh60 billion, and you can see road contractors are back on the road, but we are raising Ksh175 billion. If you add that, if you use even half of that money this financial year and add it to our normal budget of about Ksh57 billion, you will have over Ksh120 billion. You will pay all the certificates for the whole financial year,” Mbadi continued.
Mbadi’s sentiments echoed those of Transport CS Davis Chirchir who defended the move, explaining that the Kenya Roads Board (KRB) securitised the fuel levy to clear the bills and revive the stalled projects.
Both Mbadi and Chirchir’s explanations are contrary to Nyoro’s sentiments which alleged that the government quietly introduced an additional Ksh7 fuel levy during a period when global oil prices were dipping.
According to Nyoro, who was speaking after the sharp fuel price hike in the latest EPRA review, this was more than a revenue-raising measure, as the levy was allegedly used as collateral to secure the Ksh175 billion as a loan.
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