MP Ndindi Nyoro: Include Sh175bn loan taken against fuel levy in national debts

Kiharu MP Ndindi Nyoro at Gituto secondary school in his constituency

Kiharu MP Ndindi Nyoro now wants the government to include a Sh175 billion allegedly taken against the Sh7 fuel levy imposed last year in the country’s loan book.

Ndindi had claimed that the government un-procedurally imposed a Sh7 levy against which it has borrowed the loan without involving parliament or disclosure, dismissing as diversionary tactics attempts by several government officials to explain the securitisation of the levy.

The MP who served as the Budget and Appropriation Committee chairperson in the National Assembly from 2022 to last year, further said the state was being deceitful in blaming the high cost of fuel prices on global trends.

The Energy and Petroleum Regulatory Authority (Epra) on July 14 raised the prices of petrol by Sh8.99 while that of diesel rose by Sh8.67 and kerosene Sh9.65.

But Nyoro pointed out that globally, fuel prices have been on a downward trend, a relief that he said is yet to be experienced in the country.

“Fuel is cheaper in all our neighboring countries. In Tanzania, petrol is selling at Sh142 a liter. In Uganda, its below Sh182 and in Rwanda, its below Sh170. The basic issue is fuel prices have been high in the country, and it’s not because of global issues,” he said.

He explained that the levy was imposed last year when global fuel prices started dropping, meaning Kenyans did not feel the change.

On Wednesday, Treasury Cabinet Secretary John Mbadi defended the decision to use the levy as security for the loan that he said was used to complete stalled road projects.

Mbadi assured Kenyans that the decision to use the levy to acquire the loan was not made in secrecy and that it’s something the government does to raise funds.

The CS clarified that the levy was added to the Sh18 Road Maintenance levy that is allocated to road upkeep and that the Sh7 was directed towards paying pending bills to contractors to allow the completion of stalled projects.

His Transport counterpart, Davis Chirchir, also noted that the ongoing securitization plan is transparent and aboveboard and that it’s being implemented in strict adherence to legal and financial protocols.

Nyoro, however, sought to know how much the government targets to garner through the levy and how much Kenyans will have to fork out to service the loan.

“Why I call it a scandal is because by the time the loan matures in seven years, we will have to pay an extra Sh100 billion in interest. How much money will Kenyans have been made to pay for it by then?” he asked.

“Why was it not as part of the national debts? Why was it excluded from the country’s loan book? Is the loan sovereign guaranteed? What was the rush for? They are trying to justify that it was for construction of roads, but we will still need to tarmac roads seven years from now.”

“Banks that gave the loan, what was given as collateral in case a new policy is established that scraps the Sh7 levy? I want to beseech government officials to stop defending the indefensible. Recognize the debt as it is,” he added.

The MP called for public resources to be utilized prudently and in strict accordance with the Public Finance Management Act.