Funding delays slowing down affordable housing project despite Kenyans’ contributions  - CoB

The government is struggling with inadequate funding for the affordable housing programme, a key component of President William Ruto’s flagship projects. This is despite billions of shillings being collected monthly from Kenyan workers to support the initiative.

Controller of Budget (CoB) Margaret Nyakang’o has revealed that the government is far from meeting its annual target of building 250,000 houses to address housing demand.

According to Nyakang’o, between July and September 2024, the State Department for Housing spent Sh7.9 billion on the programme, only half of the expected Sh15.8 billion for the quarter.

The expenditure represents just 25 per cent of the annual affordable housing budget of Sh63.22 billion.

The CoB has identified financial shortfalls as a critical hurdle, stating that most projects planned by the State Department for Housing and Urban Development were either behind schedule or had surpassed their target completion dates, except for those under the Kenya Urban Support Programme II.

“Except for the project under Kenya Urban Support Programme II, all the projects planned to be implemented by the State Department for Housing and Urban Development were either past the target completion date or lagging the implementation schedule,” Nyakang’o said.

Further complicating the situation, Nyakang’o noted that the Kenya Informal Settlement Redevelopment Project (Kisrip) failed to attract funding, contrary to the government’s plans to close the housing gap by delivering 250,000 houses annually.

The Kisrip project, which began in July 2024, is intended to receive Sh936 million in government funding over three years, with completion expected by June 2027.

However, the CoB’s report reveals that only Sh25 million was spent on the project during the three months leading up to the end of September 2024, a third of the expected expenditure for the period.

Point of contention

The issue of funding has been a point of contention, with Housing Principal Secretary Charles Hinga explaining in May that out of the Sh34.7 billion collected in the Housing Levy by April 2024, Sh20 billion was transferred to the Affordable Housing Board.

However, due to legal limitations, the board can only invest in Treasury Bills and Bonds, not implement housing projects.

“The Board can only invest the money in Treasury bills because it is not an implementing agency. The Act does not provide an avenue for the board to spend the money,” Hinga told Parliament’s Housing, Urban Planning and Public Works Committee.

Controversy continues to surround the implementation of the affordable housing programme.

While the government claims that 4,888 houses have been completed in the past two years, a recent report by the Architectural Association of Kenya suggests that only 1,189 houses have been finished since the current administration took office.

Meanwhile, President William Ruto plans to unveil the houses this January.

In his New Year message to Kenyans, he reiterated his commitment to delivering for Kenyans, highlighting the government’s plans for continued growth in 2025.

“In 2025, I will have the honour of handing over the first keys to completed affordable housing units to hardworking men and women from all walks of life,” he said, expressing hope that the country will continue to progress towards achieving “the Kenya We Want.”