The government has cut outstanding road-sector bills by Sh68.59 billion, bringing State Department for Roads pending bills down to Sh98.17 billion in the financial year ended June, according to a budgetary review reported by Business Daily and Kenyan Business Feed.
That is 23.5 per cent below the peak of Sh166.76 billion in 2023/24. Bills fell by Sh30.19 billion in the latest year after a Sh38.40 billion reduction the year before, a combined 41.1 per cent drop from the peak backlog that had left some contractors abandoning sites or facing auction of assets by lenders.
How the Road Maintenance Levy Fund helped
The department credited securitisation of the Road Maintenance Levy Fund with settling payment certificates and speeding some project work. Under the scheme, part of future fuel-levy receipts is committed to investors so the State can raise cash against those flows without waiting solely on annual budget votes.
The levy rose from Sh18 to Sh25 per litre of petrol and diesel in July 2024. In April 2025 the government earmarked Sh7 of every Sh25 to raise Sh175 billion through bank bridge loans and bonds. In November 2025 a further Sh5 per litre lifted the committed portion to Sh12 of every Sh25, widening the pool available to repay that financing.
President William Ruto said in March that an RMLF securitisation bond would come to the Nairobi Securities Exchange in 2026. “The RMLF has raised for us Sh175 billion, and we will be bringing it here so people can trade it as well,” he said. The bond is meant to refinance part of the bank loans used to clear historic bills accumulated up to December 2024.
Fewer kilometres built
Clearing arrears has not restored the previous pace of construction. The department reported 2,089.25 kilometres built in the three years to June 2026, against 3,805 kilometres in the preceding three years — a fall of 1,715.75 kilometres, or 45.1 per cent.
The remaining Sh98.17 billion still weighs on contractors waiting for payment, and financiers that extended credit against unpaid certificates. Separately, Cabinet last Friday approved payment of 28,726 verified claims worth Sh23.74 billion for bills of Sh50 million and below, covering a wider pending-bills clean-up beyond the roads docket.
Committing future levy income to investors frees cash for old certificates but leaves a thinner share of the levy for routine maintenance and new work, a trade-off the next budget cycles will have to manage as the bond listing timetable firms up.
Sources: Business Daily | Kenyan Business Feed
Photo: Trevor Bake / Wikimedia Commons (CC BY-SA 4.0)
