Government sued for using road levy as collateral in Sh175bn loan deal

Treasury CS John Mbadi before the Standing Committee on Devolution and Intergovernmental Relations at Bunge Towers, Parliament, Nairobi. July 17th,2025 [Elvis Ogina, Standard] A court battle over the government's decision to use road maintenance levy funds as collateral for a Sh175 billion loan from the African Development Bank, Trade and Development Bank, and United Bank for Africa has landed in court. Lawyer Ashioya Biko and Jateso Peter Imwatok, in their case filed before the High Court, claimed that the money now being borrowed was not budgeted for. Their lawyer, Owiso Owiso, said there was neither public participation nor authorisation from Parliament for the State to use the funds collected from motorists and businesses as security for loans. He asserted that the Cabinet Secretary responsible for Finance must provide annually to the National Assembly estimates of both the revenue, including all proposed loans or borrowing, and expenditure of the national government for approval. At the same time, he argued that the CS ought also to submit to the House the National Government debt management strategy and estimated revenues, including all proposed loans and expenditures, to the August House. "In the estimates presented to the National Assembly by the Cabinet Secretary responsible for Finance for the Financial Years 2024/2025 and 2025/2026, there was no indication whatsoever of any loans or borrowing, external or domestic, to be procured with respect to and as against the Road Maintenance Levy as collateral or security or guarantee for any such loan; consequently, no such borrowing/loan was ever approved by the National Assembly," argued Owiso. Biko and Imwatok sued the Kenya Roads Board, the Ministry of Transport and Roads Cabinet Secretary, the National Treasury, and the Ministry of Energy and Petroleum Cabinet Secretary. According to their lawyer, the Sh175 billion has allegedly not been deposited into the Consolidated Fund as required by law. Owiso argued that the move denies Kenyans an opportunity to know how the money will be used and denies oversight by, among others, the Controller of Budget and the Office of the Auditor-General. He claimed that the Kenya Kwanza government intends to borrow more money using the levy, thereby allegedly exposing the public to loss and pilferage. The lawyer stated that the road maintenance levy funds are ring-fenced for a particular purpose. He argued that diverting the funds for other causes, other than the construction and maintenance of roads, would in turn hurt Kenya's infrastructure. He further argued that there is allegedly no clear explanation of what the borrowed funds will be used for. The two want the court to declare that using the levy funds as collateral is illegal. At the same time, they want each of the persons and entities sued to be personally held liable for the loan allegedly taken.

Government sued for using road levy as collateral in Sh175bn loan deal

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Government sued for using road levy as collateral in Sh175bn loan deal

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