Housing levy under fire: Ndindi Nyoro says sector worse off despite billions collected from Kenyans
He argued that the levy has done more harm than good, noting that the very sector it was meant to support has instead recorded negative growth since its introduction.
Kiharu MP and former Parliamentary Budget Committee chair, Ndindi Nyoro, has intensified his criticism of the government’s fiscal policies.
Speaking at an event in Nairobi on Monday, Nyoro aimed at the Housing Levy, even as the fund surpassed its target by collecting Sh73.2 billion in the 2024/25 Financial Year.
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He argued that the levy has done more harm than good, noting that the very sector it was meant to support has instead recorded negative growth since its introduction. Nyoro contrasted this with previous years when the construction sector expanded more robustly without the extra tax.
The levy, introduced under the Affordable Housing Act 2024, requires both employers and employees to contribute 1.5 per cent of their monthly gross earnings—amounting to a total deduction of three per cent. It was positioned as a key driver of job creation and economic growth in the construction industry.
Nyoro, however, disagreed.
“The government is collecting Sh73 billion, literally taking Sh73 billion from the private sector and households. Now what is the output?” he asked.
Shrinking
According to him, the past year to June—once considered one of the busiest years in house building—saw the construction sector shrink. Figures from the latest Kenya Economic Survey by the Kenya National Bureau of Statistics (KNBS) back his claim.
The report shows the construction sector declined by 0.7 per cent in 2024, compared to a 3.0 per cent growth the year before. Cement consumption, a key performance indicator, also dropped.
Nyoro noted that in the same year the government claimed to be ramping up housing projects, cement consumption fell by 7.9 per cent, alongside reduced steel usage.
He further challenged the government’s claim that the levy was creating jobs.
“I have seen government officials saying the housing project has created 300,000 jobs; others say half a million jobs. Now, the same government data shows us this. In the year 2024, the people employed in the construction sector shrank by 1.3 per cent. And all the people employed in that sector are only 223,400, a smaller number than in the year 2022, when we never had the housing levy.”
Nyoro added, “Many times, we may be beating drums on this side for celebration, but the economy cannot be cheated. What this is showing is that the money for the housing levy was more efficient for our economy when it was in the pockets of Kenyans.”
“Kenyans were building their houses more efficiently than the government could build them. Because the pictures we see on the timelines on social media, advertisements of housing projects, should translate into data. But then we see photographs.”
KNBS data shows private sector employment in construction fell from 226,300 in 2023 to 223,400 in 2024. In contrast, public sector employment rose slightly, from 9,700 in 2023 to 9,900 in 2024.
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