The Kenyan government is exploring innovative financial strategies to spur economic growth amid tightening fiscal space and rising debt concerns. The National Treasury has proposed the securitisation of key revenue streams such as the road maintenance levy, Higher Education Loans Board (HELB) payments, the Hustler Fund, and funds for Youth and Women Enterprise as a means to raise capital without further increasing national debt.
Securitisation involves selling future revenue streams to investors in exchange for immediate funding. This approach allows the government to access much-needed funds now while committing future collections as repayment. According to Treasury Principal Secretary Dr. Chris Kiptoo, up to 50 percent of the road maintenance levy collections could be channelled towards securitisation to guarantee the completion of ongoing road projects. This move is expected to reassure investors that essential infrastructure development will continue uninterrupted.
With Kenya’s fiscal constraints limiting traditional borrowing options, securitisation offers a market-based mechanism for the government to raise funds. Dr. Kiptoo revealed that, in collaboration with the Central Bank of Kenya and the Capital Markets Authority, the Treasury is working on instruments that could tap into Kenya’s diaspora community, enabling them to invest in the country’s development through securitised revenue streams.
In addition to securitisation, the government plans to implement a Single Treasury Account (STA) starting in the 2025/26 financial year. The STA aims to enhance transparency and accountability in public finance management by consolidating all government revenues and expenditures into a unified account. The rollout will occur in three phases, covering national ministries and agencies, county governments, and state corporations respectively. This reform is expected to reduce borrowing costs and improve fiscal discipline.
While the government has outlined these innovative funding strategies, specific details on how the proceeds from securitisation will be allocated remain limited. The success of this plan will largely depend on clear project prioritisation and robust financial management to ensure that these funds translate into tangible development outcomes.
As Kenya navigates economic challenges, securitisation and the Single Treasury Account represent significant steps toward sustainable fiscal management and long-term growth.
