Budget office accuses government of shifting financial burden onto households
One of the first policy changes under President Ruto's leadership was a dramatic increase in National Social Security Fund deductions, which jumped by more than 10 times.
The Parliamentary Budget Office (PBO) has raised concerns over the increasing financial burden on households under the current administration, accusing the government of evading its responsibility to finance key programmes such as affordable housing, universal healthcare, and higher education.
According to the PBO’s analysis of the 2025/26 Budget Policy Statement, these extra financial demands, being indirectly transferred onto households, are straining the economy, particularly as falling employment and stagnant wages worsen the situation.
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The PBO highlights that although the government has not explicitly stated these shifts in policy, there is a clear trend of passing on the financial responsibility for various government initiatives to households, rather than financing them through traditional taxation.
The report specifically cites the affordable housing programme, the new Social Health Insurance Fund, changes to the university funding model, and adjustments to the social security fund.
"These changes could potentially reduce household disposable income, thus adversely impacting aggregate demand," the report states.
Under the leadership of former President Uhuru Kenyatta, similar initiatives were introduced, aiming to enhance access to affordable housing, healthcare, social security and higher education.
However, these programmes were largely funded through the government’s public coffers. In stark contrast, President Ruto's administration has significantly altered this approach.
One of the first policy changes under President Ruto's leadership was a dramatic increase in National Social Security Fund (NSSF) deductions, which jumped by more than 10 times, from a flat rate of Sh200 to a maximum of Sh4,320, depending on income levels.
The introduction of a new university funding model, which has raised fees and shifted the responsibility of paying for university education to parents or loans from the Higher Education Loans Board (HELB), further added to the financial pressure on families.
Additionally, the Affordable Housing Act, passed by Parliament last year, introduced a 1.5 per cent income levy to fund affordable housing, which is matched by employers, creating a further financial strain on households.
The widespread rollout of affordable housing projects has also led to a slowdown in private investments within the construction sector, with the PBO warning that this has hindered overall economic growth.
“The anticipated active role of public investment in the construction industry may have slowed down private investments in the sector, thereby reducing the overall contribution of the sector to the GDP,” the PBO report notes.
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