Govt Confirms Securitising Fuel Levy as Motorists Threaten Protests

Hello and welcome to the Money News Roundup Newsletter, where we are covering the fuel securitisation debate as well as the tolling of the Rironi–Mau Summit Road.

CS John Mbadi Defends Securitisation of Fuel Levy

After facing criticism over the securitisation of the fuel levy, Treasury Cabinet Secretary John Mbadi strongly defended the decision, arguing that it was necessary to revive stalled infrastructure projects.

Securitisation is a financing model where an institution uses predictable income streams to raise funds. In this case, the government has securitised part of the Road Maintenance Levy Fund (RMLF), committing Ksh7 out of the Ksh25 collected per litre of fuel. The model is expected to run for 10 years.

In his address, Mbadi stated that the government made no apologies for securitising fuel levies to ensure infrastructure projects do not stall. The plan is expected to revive 580 projects.

“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. We have no apologies to make,” he said.

“If you securitise this money — and by the way, we have already received over Ksh60 billion — you can see road contractors are back on site. We are raising Ksh175 billion. If we use even half of that money this financial year, and add it to our normal budget of about Ksh57 billion, we will have over Ksh120 billion. That’s enough to pay all certificates for the whole financial year.”

Catch Up Quick: Shortly after fuel prices were increased by more than Ksh8 per litre across petrol, diesel, and kerosene in the July/August review, Kiharu MP Ndindi Nyoro claimed the government had quietly introduced an additional Ksh7 fuel levy, even as global oil prices were dropping.

Mbadi, however, insisted that Ksh18 out of the Ksh25 collected per litre will remain untouched. Read More in The Star.

Motorists Threaten Protests

Motorists are threatening to hold protests after the Energy and Petroleum Regulatory Authority (EPRA) raised fuel prices to Ksh186.31 (petrol), Ksh171.58 (diesel), and Ksh156.58 (kerosene) in the latest pricing review.

In a notice on July 17, the Motorists Association of Kenya (MAK) accused the government of exploiting Kenyans by raising prices despite global oil prices remaining below $70 per barrel.

“This abrupt hike of Super Petrol by Ksh8.99 and Diesel by Ksh8.67 per litre caught motorists completely by surprise. We are shocked and lost for words,” the association stated.

“When world prices were dropping, EPRA only reduced local prices by a paltry one shilling — insulting the millions of motorists who already sustain this government through oppressive taxation. Today, half the cost of fuel is made up of taxes, which is economically destructive and morally wrong.”

What Motorists Want:

The motorists are calling for:

• A return to a free market system, where pump prices are determined by genuine global market forces and healthy competition.
• The reintroduction of the Open Tender System (OTS), which allowed for the procurement of oil from the most affordable suppliers and ensured fair downstream distribution at the lowest possible price.
• Stronger protection against adulterated fuel.

“If these demands are not met, motorists will have no choice but to pursue peaceful protests and legal action to defend our right to fair, transparent, and affordable fuel pricing,” they concluded. Read more on Kenyans.co.ke.

Here are other top business headlines this morning;

NSSF Recovers Billions in Penalties, But Gaps Remain in Pension Remittances

The National Social Security Fund (NSSF) recovered Ksh2.3 billion in penalties from employers who delayed remitting workers’ pension contributions by December 2024, according to a report by Auditor General Nancy Gathungu. While the total unremitted amount stood at Sh26.9 billion, only Sh155 million in principal had been recovered, with an additional Sh8.8 million tied up in liquidation cases. Another Sh7.9 million is under repayment instalments.

As reported by Daily Nation, the NSSF issued demand notices for Sh1.83 billion but continues to face challenges recovering dues, mostly owed by ministries, counties, and defunct local authorities. The Auditor General criticised the NSSF for failing to implement effective collection measures, warning that some of the debt may never be recovered.

Peter Munga Backs Sh468Bn Nairobi-Mombasa Expressway Project

Billionaire businessman Peter Munga has partnered with Everstrong Capital, a US-based infrastructure investment firm, on the proposed Sh468 billion expressway linking Nairobi and Mombasa. The firm, now operating under Munga’s Quickpass Limited, is behind what is expected to be Africa’s largest toll road project, aimed at easing congestion on the key trade route to the Mombasa port.

According to Business Daily, the firm is awaiting final approval to construct a 4–6 lane dual carriageway. Investors plan to recover their funds by collecting toll fees from motorists over a 30-year period, offering long-term cash flow potential.

Govt Mulls Tolling Rironi-Mau Summit Road

A report by the Daily Nation has shown that the government is keen on forging ahead with the Rironi-Nakuru-Mau Summit Toll Road, a project driven by high debt and low tax revenues through Public-Private Partnerships. A central issue dogging this nine-year-old project is the absence of an identified free alternative route. Despite this, government officials believe they have a plausible explanation for why motorists, especially those who often spend nights on the current road due to traffic snarl-ups, should be open to the idea of paying for the new road.

Auditor General Blocked from Accessing NHIF System for 4 Years as Billions Remain Unverified

Auditor General Nancy Gathungu has revealed that the National Health Insurance Fund (NHIF) blocked her office from accessing its e-claims system, preventing verification of over Ksh22.5 billion in transactions, Eastleigh Voice reports. The audit for the year ending June 30, 2024, found that NHIF’s system vendor withheld log files critical for confirming whether medical claims were processed correctly or manipulated.

The report flags recurring irregularities, including Ksh16.8 billion paid for late claims, Ksh3.1 billion disbursed before claims were submitted, and Ksh990 million paid without prior approval. Overpayments of Ksh1.2 billion and duplicate entries worth Ksh1.9 billion also remain uncorrected. Despite repeated warnings since 2020, NHIF has failed to address transparency issues or implement key reforms.

Tax-Free Talanta Sports City Bond Fully Subscribed by Savvy Investors

Investors in the Talanta Sports City infrastructure bond will earn Ksh57.6 billion in interest over 15 years without paying income tax, after the Ksh44.79 billion bond was granted full tax exemption to enhance its appeal. The bond, listed on the Nairobi Securities Exchange, is now on par with government infrastructure bonds, which are similarly tax-free, unlike Treasury bills and bonds that attract withholding tax. With an estimated total payout of Ksh102.42 billion and a return rate of 15.04%, the bond has become attractive to high-net-worth investors and institutions, as reported by Business Daily.

The bond also exempts investors from capital gains tax on profits made from secondary market sales. This exemption is expected to cost the government around Sh5 billion in forgone tax revenue. The bond was targeted at informed and wealthy investors, with a minimum buy-in of Sh1 million and trading lots of Ksh100,000. Backed by Talanta Stadium but funded through the Sports, Arts and Development Fund, the bond was oversubscribed at 100.2%, raising Ksh44.875 billion against the Ksh44.791 billion target