The government will borrow money to settle part of its pending bills, President Uhuru Kenyatta said yesterday.
In an address to the nation, the head of state said the government would float an infrastructure bond of Sh150 billion, with the funds raised going to the completion of all ongoing road and infrastructure projects.
This as the government seeks to put money into Kenyans’ pockets primarily by settling pending bills valued at over Sh100 billion.
“With the planned infrastructure bond of Sh150 billion, all infrastructure-related bills will be settled early this year and aid the completion of all ongoing road and infrastructure projects across our homeland,” said the President in his speech from State House, Mombasa.
Uhuru noted that 70 per cent of pending bills owed by national and county governments, and verified as payable, were paid by December 31.
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The national government has paid about Sh10.2 billion out of Sh14.9 billion of pending bills that had been verified.
The country plans to raise up to Sh360 billion in the next three years by issuing bonds, with the legal framework having been put in place to enable road agencies float such debt instruments.
The bonds the Kenya Roads Board (KRB) seeks to issue will finance the building of new roads and maintenance of existing networks, most of which have been damaged by the recent heavy rains. The State Department of Transport has accumulated pending bills of close to Sh54.5 billion for development expenditure, which the president expects to be offset using proceeds of the bond.
In December, Uhuru signed into law the Kenya Roads Board (Amendment) Bill, 2019, paving the way for the government to seek a Sh800 billion infrastructure bond in four years.
The law gives KRB powers to seek the funds to allow the government to deliver on its pledge of constructing 10,000 kilometres of roads by 2022.
This will also allow the board to set aside funds for repayment of loans and other facilities taken for road maintenance, development and rehabilitation.
The new law will restructure the mandate and operations of the board and other agencies in the sector, including Kenya Highways Authority, Kenya Rural Roads Authority and Kenya Urban Roads Authority.
