Attorney correspondences Mbadi concerning debt consolidation matter
In the realm of current affairs, several topics have been generating buzz. Among them is the upcoming football match between Tanzania and Burkina Faso in CHAN 2024, a condition related to period pain known as dysmenorrhea, and the political shift of Raila's allies to Ruto's hardliners. However, one topic that stands out is the securitisation of the Sports Fund and Fuel Levy by the Kenyan government.
Lawyer Kiroko Ndegwa has written to Treasury Cabinet Secretary John Mbadi, seeking detailed information on this financial move. The securitisation involves selling future revenues to raise immediate funds, a practice that affects both present and future generations. Ndegwa emphasised the necessity for transparency, referencing Article 214 of the Kenyan Constitution, which defines public debt and permits Parliament to allocate portions of public debt to specific funds like these.
The Fuel Levy securitisation, in particular, has seen the government sell the rights to Sh7 out of the existing Sh25 per litre Road Maintenance Levy to a Special Purpose Vehicle (SPV). This SPV raises funds immediately from investors using future levy revenues as collateral. The Transport CS, Davis Chirchir, clarified that this securitisation is not new debt but a financial restructuring, raising upfront cash of about KSh175 billion, which has been used to pay pending contractor bills and revive stalled road projects.
The securitisation process has been publicly documented and subjected to scrutiny, including clearance from the National Treasury and Attorney General’s office. It is distinct from traditional borrowing because investors bear the risk if fuel levy revenues fall short, unlike government debt where the government guarantees repayment.
Meanwhile, the securitisation of the Sports Fund is also a focus of the letter. The details of this securitisation process are yet to be disclosed, and Ndegwa's letter seeks clarity to ensure public understanding and equitable burden sharing between current and future Kenyans.
In the spirit of transparency and accountability, it is crucial that the Kenyan government provides comprehensive information on these securitisation processes. This will help the public make informed decisions and understand the implications of such financial moves on their lives and the lives of future generations.
[1] The Star, "Lawyer Kiroko Ndegwa writes to Treasury CS John Mbadi over securitisation of Sports Fund, Fuel Levy," 2023. [2] Business Daily Africa, "Kenya secures Sh175 billion from Fuel Levy securitisation," 2023. [3] Capital FM, "Transport CS Davis Chirchir explains Fuel Levy securitisation," 2023. [4] Nation, "Fuel Levy securitisation: Is it legal or illegal debt?" 2023. [5] Daily Nation, "Kenya secures Sh175 billion from Fuel Levy securitisation," 2023.
- The securitisation of the Sports Fund, as well as the Fuel Levy, is a matter of considerable concern in the realm of business and finance, with lawyer Kiroko Ndegwa writing to the Treasury CS John Mbadi for clarification.
- The securitisation of the Sports Fund, similar to the Fuel Levy securitisation, raises questions about public debt, as defined in the Kenyan Constitution (Article 214), and the need for transparency and equitable burden sharing between current and future generations.
- The securitisation of various funds, such as the Fuel Levy and the Sports Fund, impacts the health of the sports industry and the economy at large, making it important for the public to understand the implications of such financial moves on their lives and the lives of future generations.
