1. RMLF is a shadow toll, a user charge. In fact, it replaced toll booths on our highways. If we define it as tax then we ought to also include school fees as tax.
2. There is no recourse to exchequer. The investors have taken full demand risk.
3. Pricing was < sovereign.
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The Road Maintenance Levy securitisation is, in my view, the clearest test of the government's "off-balance-sheet" financing model. It therefore deserves far more scrutiny than it has received.
Under Phase I, Sh7 of the Sh25 per litre fuel levy was pledged to raise KSh 175bn for road pending bills. Phase II pledges a further Sh5 per litre. Parliament's Budget Committee placed its target at about KSh 120bn, whereas the Roads CS reports KSh 139bn raised (Aug 2026). If the two phases are cumulative, Sh12 of every Sh25, that is 48% of the levy, now belongs to investors. Even on the most conservative reading, no less than 28% is already committed.
The levy was created to maintain roads. Consequently, every shilling pledged to past arrears is a shilling withdrawn from future maintenance. This is all the more worrying given that road spending had already declined from KSh 208.2bn in FY21/22 to KSh 133.2bn in FY23/24 (KNBS, cited by the PBO). Maintenance is therefore squeezed twice: by a smaller budget today and by a smaller levy tomorrow.
Furthermore, the Parliamentary Budget Office observed in February that the 2026 Budget Policy Statement contains no measures to prevent new pending bills from accumulating. It follows that securitising arrears without such a rule does not resolve the problem. It merely refinances it, and the next round of arrears will inevitably claim the next slice of the levy.
Finally, there is the question of classification. The underlying cash flow is a statutory tax, and the obligor is, in substance, the State. On what basis, then, is this not public debt? Calling it an asset-backed security alters the balance sheet on which it is recorded. It does not alter who bears the risk. Should fuel volumes fall or the levy be reduced, the shortfall returns to the Exchequer regardless.
None of this is to say that securitisation is inherently wrong. It is, however, to say that it must pass a test the government has yet to publish.