NAIROBI, Kenya — The Kenyan government has announced an increase in the Road Maintenance Levy (RML), citing budget shortfalls and rising inflation as key factors behind the decision.
This adjustment is necessary to sustain and improve the country’s expansive road network, now valued at approximately Sh4 trillion.
The Ministry of Roads and Transport’s detailed report highlights the dual impact of inflation and the depreciating Kenyan shilling against major currencies on the cost of imported construction materials.
These pressures have persisted since the last RML adjustment in 2016, when the levy was increased from Sh12 to Sh18 per litre.
Effective immediately, the levy will rise by Sh7, bringing it to Sh25 per litre of petrol and diesel.
The Road Maintenance Levy has been periodically increased to cope with changing economic conditions since its inception in 1994.
The levy has seen incremental rises from Sh1.5 per litre in 1994 to the current Sh25.
The latest adjustment is slightly lower than a previously considered proposal of Sh28 per litre, which would have projected an annual RMLF revenue increase to Sh129 billion.
Since the last review, the Kenyan shilling has depreciated significantly, losing up to 34% of its value against the US dollar, and substantial percentages against other major currencies such as the British pound, euro, and Chinese yuan.
This depreciation, coupled with high inflation, has driven up the costs of road construction and maintenance, creating an annual deficit of Sh63 billion in the road maintenance fund.
Over the past decade, with substantial help from development partners, Kenya has undertaken significant road development and rehabilitation projects.
The latest Countrywide Road Inventory and Condition Survey (2023) reveals that the road network has expanded to 239,122 kilometers, a 48% increase from 2016.
This includes a 47% growth in the paved road network to 25,410.69 kilometers.
Despite the expansion, the government faces challenges in securing sufficient funds for road maintenance.
The Ministry’s report indicates that to maintain the real value of the RMLF at 2016 levels, annual collections in the 2023-24 financial year should be at least Sh122 billion.
The backlog in road maintenance has grown from Sh445 billion in 2018 to Sh727 billion in 2023, underscoring the urgent need for additional resources.
The levy increase has sparked opposition from motorists and some public sectors, who call for alternative revenue sources.
Despite this, the government emphasizes the necessity of the levy to maintain and develop the road infrastructure vital for economic growth.
Former Transport CS Kipchumba Murkomen noted that the decline in the shilling’s value demands more funds to purchase imported materials, further justifying the need for the levy hike.
