The East African nation has been struggling to fund development projects due to slower growth in revenue from taxes, high debt repayments and an increase in expenditure demands including from its 47 local authorities.
President William Ruto’s government, which took office in September 2022, has been trying to secure funds to finish road construction across the country.
The latest initiative involves the securitisation of the road maintenance levy, which is set at 18.00 shillings ($0.1392) per litre of fuel at the pump, allowing the Kenya Roads Board to access the bank financing at cheaper rates.
“They have received a funding of about $600 million,” Finance Minister John Mbadi told Reuters.
Kenya is still seeking a bigger transaction that could take the form of a privately placed bond or a syndicated loan, for a maximum of $1.5 billion, he said.
The short-term funding, pending the bigger financial deal, will be used to pay off contractors for urgent road works.
The cash goes straight to the roads board, which conducts maintenance of roads on behalf of the government. Ruto’s government has also turned to China to secure more funds for a major highway expansion project.
($1 = 129.3000 Kenyan shillings)
By Reuters
