How counties will share Sh3.7bn roads levy cash

However, newly released data reveal how the counties' own multi-billion shilling ambitions for their road networks would not be funded.

Nakuru county received the largest single allocation of Sh183.4 million, followed by Nairobi (Sh120.1 million) and Machakos (Sh111.1 million).

On the lower end, counties like Nyamira and Mombasa received Sh41.4 million and Sh45.6 million, respectively, with Trans Nzoia getting Sh52.8 million.

Nyeri received Sh100 million, followed by Murang’a (Sh94 million), Uasin Gishu (Sh86 million), Kilifi (Sh85.8 million) and Marsabit Sh83 million.

Kakamega got Sh81 million, Sh78 million for Taita Taveta, Sh63 million for Mandera and Sh63 million for Garissa.

Bungoma received Sh63 million from the roads levy kitty, followed by Samburu (Sh60 million), while Tharaka Nithi got Sh55 million.

Allocations for 28 counties were not disclosed on the grounds that they were yet to submit their project work plans for review by the roads board.

The disbursement, detailed by Cabinet Secretary for Roads and Transport Davis Chirchir before the Budget Committee chaired by Alego Usonga MP Sam Atandi, was the result of a consensus between the Office of the Attorney General, the Ministry of Roads and the National Assembly.

The 19 counties alone sought or presented work plans amounting to Sh3.35 billion, nearly matching the entire national disbursement.

Nakuru county, for instance, received Sh183.4 million but submitted a work plan requiring Sh527.6 million, sustaining a shortfall of Sh344 million.

Murang’a county’s plan (Sh270.9 million) overshot its allocation of Sh94.7 million by Sh176 million, pointing to massive gaps between the county's desired amounts.

A few counties, namely Kakamega, Samburu and Nairobi, submitted plans that were precisely aligned or nearly identical to their allocations.

Nyeri county was the only one that received more than the Sh80.7 million it applied for. It was allocated Sh100.3 million.

Counties could not get the cash after the High Court declared the section of the Kenya Roads Board Act governing RMLF allocation unconstitutional.

Although the Court of Appeal granted a 12-month stay to allow for amendments, the legal framework is yet to be properly aligned.

A proposed law by the National Assembly Caucus led by Homa Bay Town MP Peter Kaluma is still in the works. It allocates five per cent of the levy cash to county governments.

This was even as Chirchir sounded the alarm that the fuel levy would not be a sustainable source of revenue for road maintenance.

He cited the emergence of electric vehicles as a potential backburner, adding that the ministry would consider increasing the fuel levy when the economy improves.

“Another strategy that is currently being investigated is the implementation of Mass Distance Charges, which are fees imposed on road users based on their usage of the roads,” the CS said.

As per the ministry data, a total of Sh115 billion was received into the kitty in the financial year 2025, the same amount projected for the year 2026.

This has, however, been clouded by pending bills to the tune of Sh174 billion, owed by the country’s three main roads agencies, Kerra, Kura and Kenha.

Chirchir painted a grim picture of the financial challenges by detailing that Sh775 billion worth of projects are to be completed in the next three years.

“The State Department of Infrastructure has been exploring ways to finance the funding requirements and identified a Road Infrastructure Loan Facility as the most viable option,” he said.

In October last year, the National Treasury approved a Road Infrastructure Bond Facility of up to Sh175 billion, to be leveraged on Sh7 from the Road Maintenance Levy.

The funds were to be applied to settle pending bills and other obligations at the state department for roads.

The CS disclosed that Eastern and Southern African Trade & Development Bank (TDB) was engaged as the transaction advisor, lead arranger and book runner for the facility.

“No guarantee has been issued by the government of Kenya for this transaction. The risks associated with the transaction rest with the purchaser of the receivables (that is, the SPV). The transaction does not sit in the books of the government,” Chirchir said.

INSTANT ANALYSIS

According to the brief, the ministry is currently processing additional payments to contractors, to bring the amounts settled to date to at least 80 per cent of the pending bills. Chirchir says that going forward, the roads department and the lead runner have set in motion processes to ensure the successful issuance of the long-term bond of Sh175 billion. He cited amendments to the RMLF Act and KRB Act, preparation of requisite documents and promotion of the upcoming issuance in the global market.