Treasury cuts Sh13.6 billion from affordable housing, slums upgrade in revised mini-budget
These cuts will impact ongoing affordable housing construction, slum upgrades and the establishment of social halls for public participation.
The National Treasury has slashed Sh13.6 billion from the funding allocated for affordable housing, slum upgrading, and social hall construction in the revised mini-budget for the financial year ending June 30, 2025.
The State Department for Housing's development budget for these projects was reduced from Sh85.2 billion to Sh71.6 billion, mainly due to lower-than-expected donor funding.
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"The decrease is mainly on account of rationalisation of the donor component in the capital expenditures. However, there's an additional personnel emolument of Sh64.5 million to cater for actual salary requirement in the financial year 2024/25 under the current expenditures," the Treasury stated in its supplementary budget report presented to Parliament.
The housing development and human settlement programme took the biggest hit, with its funding dropping from Sh77.5 billion to Sh71.6 billion. This included a reduction in capital expenditure for development, which fell from Sh76.7 billion to Sh68.8 billion.
These cuts will impact ongoing affordable housing construction, slum upgrades and the establishment of social halls for public participation.
Metropolitan development
The urban and metropolitan development programme was also affected, with its allocation shrinking from Sh8.6 billion to Sh2.9 billion.
This programme oversees planning and zoning regulations, integrated transport infrastructure, and water and waste management. As a result, national slum upgrading projects will be delayed, with the completion target dropping from 100 per cent to 50 per cent.
The Oyugis and Utawala social halls and Kovoka market stalls, originally set for full completion, will now only reach half of their expected progress.
Despite the budget cuts, some targets under the affordable housing project have been slightly revised upward. For instance, the completion rate for housing units in Shauri Moyo, Nairobi, has increased from 20 per cent to 25 per cent.
The overall budget for the State Department for Housing and Urban Development was revised from Sh86.5 billion to Sh74.9 billion in the supplementary estimates.
The reduction primarily affected capital grants to government agencies, which were cut from Sh18.6 billion to Sh6.45 billion, a Sh12.2 billion decline.
The acquisition of non-financial assets also dropped from Sh64.8 billion to Sh60.7 billion.
Meanwhile, the government allocated an additional Sh1.99 billion for current expenditures, including Sh64.5 million for employee compensation and Sh1.93 billion for transfers to government agencies.
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