The Government of Kenya has signed a US$150 million (KSh16.38 billion) financing agreement with United Bank for Africa (UBA) as part of a landmark US$1.35 billion (KSh175 billion) programme aimed at clearing unpaid road construction bills and restarting stalled projects across the country.
Industry observers, however, caution that while securitisation is innovative, it requires strict transparency and accountability to ensure that future revenues are properly managed and that the burden is not simply shifted forward.
The Bank of Ghana recently suspended the foreign exchange license of the United Bank of Africa, Ghana subsidiary, over FX market violations.
Kenya is ranked 121st out of 180 countries on the Transparency International Corruption Perceptions Index (CPI) for 2024.
The Kenya government has however promised that the programme will be fully monitored and audited to protect public interest.
The arrangement, which is one of Kenya’s boldest experiments with securitisation, is designed to inject cash into more than 580 road projects that have been frozen due to a massive funding shortfall. UBA Kenya, a subsidiary of the Lagos-based UBA Group, is one of the largest financiers participating in the deal.
According to government data, Kenya has accumulated unpaid road construction bills totalling KSh175 billion, leaving many contractors stranded and communities waiting for key projects to resume.
The new financing programme will channel a portion of the Road Maintenance Levy into a special purpose vehicle (SPV) that will securitise the future revenues, raising upfront cash to settle the backlog.
UBA Group Chief Executive Officer, Oliver Alawuba, explained that the bank’s participation reflects long-term confidence in Kenya’s economy and infrastructure prospects.
“Infrastructure and SMEs are interconnected—one builds the roads, the other drives the economy on them. At UBA, we are financing both sides of that equation,” Alawuba said.
Roads and Transport Cabinet Secretary, Davis Chirchir, who had earlier defended the securitisation model in July, described it as a transparent and legally compliant approach to resolving contractor arrears without increasing Kenya’s external debt. “This model allows us to pay contractors promptly, revive suspended projects, and bring lasting relief to communities—all without adding to Kenya’s debt burden,” he stated.
Under the structure, Sh7 from the existing Sh25 per litre fuel levy will be assigned to the SPV. The SPV will then securitise the future inflows to generate immediate cash for the government, contractors, and stakeholders.
Chirchir stressed that the Kenya Roads Board will not carry further liabilities once the rights to future collections are transferred to the SPV.
Analysts say the move highlights a growing trend among African governments to use securitisation as an innovative financing tool for infrastructure.
With rising debt levels across the continent, securitisation allows countries to leverage predictable revenue streams such as taxes, levies, and royalties, instead of adding fresh loans to already heavy public debt burdens.
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