Fresh payments to road contractors are set to inject new life into Kenya’s infrastructure sector, after years of stalled projects and mounting unpaid bills.
Roads Principal Secretary Joseph Mbugua said the government will release at least Ksh 20 billion this week to settle certificates for work completed in the first three months of the year. The move is part of a broader effort to keep payments up to date and avoid a return to the backlog that previously choked the sector.
“We don’t have any pending bills, and this week we plan to pay certificates raised in Q1 of this year. Going forward, we don’t want to have pending bills,” Mbugua said.
The latest payout comes on the back of a major clean-up exercise in which the government cleared Sh177 billion owed to contractors dating back to 2020. At the height of the crisis, delayed payments had affected at least 875 contracts, forcing many firms to scale down operations or abandon projects altogether.
Smaller contractors who owed Ksh 50 million and below were paid first, with about 560 contracts settled early last year. The remaining balances were cleared in phases up to December, allowing most projects to resume.
Unlocking cash from fuel levy
A key driver behind the payments has been the securitisation of the Road Maintenance Levy Fund, a financing model that allows the government to access money upfront using future fuel levy collections.
Under this approach, part of the levy charged per litre of fuel is committed to investors in exchange for immediate funding. An initial securitisation of Ksh 7 per litre enabled the government to raise about Sh175 billion, which was used largely to clear pending bills.
The strategy has since been expanded, with the Cabinet approving the securitisation of up to 50 per cent of the levy, equivalent to Ksh 12.50 per litre, giving the State more flexibility to finance road works.
Officials say this model has helped bridge long-standing funding gaps without introducing new taxes, while also restoring confidence among contractors who had grown wary of delayed payments.
Road projects, limited resources
With most arrears now cleared, the government is shifting focus to both completing ongoing works and launching new projects. It has set a target of constructing at least 6,000 kilometres of roads in the medium term.
Currently, about 3,887 kilometres of roads are under construction across the country.
However, the scale of investment required remains a major hurdle. Kenya’s road network stands at roughly 239,122 kilometres, with the bulk under county governments and about 57,000 kilometres classified as national trunk roads.
Only 20 per cent of these roads are in good condition, while nearly half are rated fair and a third are in a poor state, highlighting the urgent need for sustained investment.
The government estimates that at least Ksh 600 billion is needed to maintain the existing network, and up to Ksh 1.78 trillion to develop and maintain it fully. This is far above the current annual allocation of about Ksh 60 billion.
“This is what brought about pending bills because you have running projects, new projects, so you end up not honouring all the contracts. This is something that we have corrected and want to maintain going forward,” Mbugua said.
Focus on efficiency and inclusivity
In Nairobi, key projects are already reflecting the renewed momentum.
Works are ongoing along Mombasa Road near Jomo Kenyatta International Airport, while the Ngong Road upgrade is progressing, featuring a modern dual carriageway and a viaduct to ease congestion.
The projects are also being designed with a broader vision of urban mobility. In addition to serving motorists, they include pedestrian walkways, cycling lanes and improved urban spaces.
Officials say this shift is meant to make roads safer and more inclusive, while also improving the overall city environment.
With payments now regularised and financing mechanisms in place, the government is betting on consistency to keep projects moving and prevent the return of costly pending bills that once slowed the sector.
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