Fact-Check: MP Ndindi Nyoro Wrong on ‘Secret’ Govt Borrowing Against Fuel Levies

Kiharu legislator’s allegations of “secret borrowing” misrepresent well-documented infrastructure financing mechanism

When Kiharu MP Ndindi Nyoro stood before cameras this week claiming the government had engaged in “secret borrowing” of Ksh175 billion against fuel levies, he painted a picture of fiscal skulduggery that would make any taxpayer’s blood boil.

The only problem?

His explosive allegations don’t match the documented financial reality.

A thorough examination of publicly available records reveals that Nyoro’s claims about clandestine government borrowing are fundamentally flawed, representing either a concerning misunderstanding of established financial practices or a deliberate mischaracterization of legitimate infrastructure financing.

What actually happened wasn’t secret at all.

The Kenya Roads Board (KRB) employed a standard financial mechanism called securitization to unlock Ksh175 billion for settling contractor debts and reviving 580 stalled road projects across the country.

Here’s how it worked: KRB took Ksh7 out of every Ksh25 collected from the Road Maintenance Levy Fund and committed this revenue stream to investors through a Special Purpose Vehicle (SPV).

In return, private investors provided the full Ksh175 billion upfront. Think of it as selling future income to get cash today – a practice as old as commerce itself.

“The KRB has successfully securitized Ksh7 out of every Ksh25 collected from the Road Maintenance Levy Fund,” read an official statement from the board.

“This move has unlocked KSh175 billion upfront to settle verified contractor arrears and revive over 580 stalled road projects across the country.”

The paper trail Nyoro apparently missed

Nyoro’s claim that “Parliament was never consulted” and that “this borrowing is not captured in official debt records” crumbles under scrutiny.

The securitization process has been extensively documented in public records:

In March 2025, National Treasury Cabinet Secretary John Mbadi publicly announced securing Ksh60 billion in bridge financing from a consortium of banks as part of this very process.

Multiple media outlets reported on the securitization mechanism throughout June 2025, with detailed explanations appearing in major newspapers.

Far from being hidden, the process was so transparent that financial analysts wrote lengthy pieces explaining how other government agencies could replicate the model.

Securitization vs. borrowing

This is where Nyoro’s critique reveals its fundamental weakness. Securitization isn’t borrowing in the traditional sense – it’s converting future revenue into immediate cash flow.

The government doesn’t owe money to anyone; private investors simply receive a portion of fuel levy collections over time.

The key distinction?

In regular borrowing, the government would be liable if revenues fell short.

In securitization, that risk transfers to the investors who made the calculation that fuel consumption would remain stable enough to justify their investment.

“KRB bears no risk of revenue shortfalls – the SPV and its investors assume that risk in exchange for a return on their investment,” explains the financing structure that Nyoro characterizes as dangerous.

The MP’s assertion that “global oil prices peaked last year, not this year” oversimplifies complex fuel pricing dynamics.

While global oil prices matter, domestic fuel costs involve currency fluctuations, supply chain logistics, and yes, the very taxes and levies that fund infrastructure development.

Nyoro correctly identifies that over Ksh80 per liter goes to taxes and levies, but his analysis stops there. He fails to acknowledge that these revenues fund the very road networks that enable economic activity across Kenya.

More importantly, the securitization model actually reduces future pressure on taxpayers.

By getting cash upfront, the government avoids having to allocate over Ksh100 billion in the 2025/26 budget to clear old contractor debts.

That money can now flow to healthcare, education, or debt repayment.

The securitization model offers several advantages that Nyoro’s critique completely ignores:

Contractors who have waited years for payment finally get their money, allowing them to restart operations and hire workers.

The construction sector, which had ground to a halt under the weight of unpaid bills, can resume activity. The government gets immediate relief from a massive liability without increasing public debt.

“This approach is expected to fast-track payments, restore contractor confidence, and boost economic activity through resumed construction,” KRB noted in its official statement.

Nyoro’s critique emerges at a particularly convenient moment – as fuel prices bite household budgets and public frustration with the cost of living peaks.

His apocalyptic warnings about “mortgaging the country’s revenue streams” and setting “dangerous precedents” read more like campaign rhetoric than serious financial analysis.

The MP warns that future governments might “pledge VAT, PAYE, or even NHIF contributions” using similar mechanisms.

This reveals a fundamental misunderstanding of how different revenue streams work and the legal frameworks that govern them.

Where Nyoro actually has a point

To be fair, the MP raises legitimate concerns about transparency and public communication.

Complex financial mechanisms like securitization deserve clearer explanation to help citizens understand how their money is being managed.

Regular parliamentary briefings on major financial innovations would enhance accountability, even when such measures fall within executive authority.

The government could do better at explaining why securitization serves the public interest better than traditional borrowing.

Contrary to Nyoro’s warnings about dangerous precedents, the KRB securitization actually sets a positive example.

Other government agencies with predictable revenue streams – Kenya Airports Authority, Kenya Ports Authority, Kenya Power – are now exploring similar models to fund infrastructure improvements without straining public finances.

This represents sophisticated financial management that reduces dependence on external borrowing while delivering immediate benefits to contractors and the broader economy.

Nyoro’s intervention follows a troubling pattern where complex policy issues get reduced to political soundbites.

His characterization of established financial practices as “secret” or potentially “unconstitutional” does a disservice to informed public discourse.

The real question isn’t whether the securitization was appropriate – the evidence clearly shows it was.

The question is whether Kenya’s political leadership can engage with sophisticated policy challenges without resorting to sensationalism and misrepresentation.

MP Nyoro’s allegations about secret borrowing and constitutional violations simply don’t hold water when examined against documented facts.

The KRB securitization represents innovative thinking in public finance, providing immediate relief to contractors while freeing up budgetary resources for other priorities.

While his concerns about transparency have merit, Nyoro’s characterization of this as fiscal impropriety is fundamentally flawed.

His critique would carry more weight if it focused on constructive improvements to oversight rather than inflammatory misrepresentations of legitimate financial practices.

The fuel levy securitization wasn’t a secret scheme to mortgage Kenya’s future – it was a sophisticated solution to a pressing infrastructure funding challenge.

The real disservice to taxpayers isn’t the securitization itself, but the political rhetoric that obscures public understanding of how modern financial mechanisms can serve the public interest.

As Kenya grapples with infrastructure funding gaps and fiscal constraints, the country needs leaders who can engage constructively with complex financial innovations, not politicians who prefer to score points through mischaracterization and alarm.

The KRB securitization deserves scrutiny, debate, and improvement – but it deserves honest analysis, not the kind of political theater that MP Nyoro delivered this week.