President William Ruto’s flagship Affordable Housing Programme is facing fresh uncertainty after the Ministry of Housing warned that funding constraints could stall its progress.
Appearing before Parliament, Principal Secretary for Housing Charles Hinga revealed that donor funding for the programme has been reduced by Ksh800 million under the FY 2025/2026 Supplementary Budget I. This brings the total allocation down from Ksh13.3 billion to Ksh12.5 billion.
Hinga cautioned that the budget cut could disrupt ongoing projects and slow down the delivery of housing units. Currently, the government is overseeing 1,700 active housing projects, but the programme is grappling with a severe staff shortage, with some officers reportedly working up to three shifts to meet deadlines.
During the session, lawmakers led by Vice Chairperson Mugambi Rindikiri questioned whether the department had anticipated the funding gap and why additional personnel had not been recruited. Hinga acknowledged that the shortfall had been foreseen, noting that 80 per cent of the allocated funds had already been utilised.
He also disclosed that part of the funds had been invested in Treasury Bills, but access to the money had been restricted by the National Treasury, further complicating project financing.
Members of Parliament pledged to engage Treasury Cabinet Secretary John Mbadi to seek clarity on the funding issues and explore possible solutions.
The financial strain comes amid revelations by Auditor-General Nancy Gathungu that at least 6,390 companies have failed to deduct and remit the mandatory 1.5 per cent Housing Levy. According to the report, although the Kenya Revenue Authority collects the levy, it lacks enforcement powers due to legal gaps in the Affordable Housing Act of 2024.
Enforcement responsibility lies with the Affordable Housing Board, which does not have access to taxpayer data, creating widespread non-compliance. Some companies have reportedly failed to deduct the levy, while others have withheld remittances.
Despite collecting Ksh73.19 billion by June 2025, the programme has delivered only 3,611 housing units, far below its annual target of 200,000 units. Additionally, Ksh45.48 billion remains locked in Treasury Bills, raising further concerns about efficiency and fund utilisation.
The programme has also taken a hit from external financing challenges. Earlier this year, the World Bank scaled down its planned commercial financing for Kenya’s housing and reform programme by nearly two-thirds. Expected contributions from lenders have dropped from Ksh116.12 billion ($900 million) to Ksh46.45 billion ($360 million).
With funding gaps widening, staffing constraints persisting and compliance issues mounting, questions are now emerging about whether the ambitious housing programme can meet its targets and deliver on its promise to Kenyans.
Source: Kenyans.co.ke
Appearing before Parliament, Principal Secretary for Housing Charles Hinga revealed that donor funding for the programme has been reduced by Ksh800 million under the FY 2025/2026 Supplementary Budget I. This brings the total allocation down from Ksh13.3 billion to Ksh12.5 billion.
Hinga cautioned that the budget cut could disrupt ongoing projects and slow down the delivery of housing units. Currently, the government is overseeing 1,700 active housing projects, but the programme is grappling with a severe staff shortage, with some officers reportedly working up to three shifts to meet deadlines.
During the session, lawmakers led by Vice Chairperson Mugambi Rindikiri questioned whether the department had anticipated the funding gap and why additional personnel had not been recruited. Hinga acknowledged that the shortfall had been foreseen, noting that 80 per cent of the allocated funds had already been utilised.
He also disclosed that part of the funds had been invested in Treasury Bills, but access to the money had been restricted by the National Treasury, further complicating project financing.
Members of Parliament pledged to engage Treasury Cabinet Secretary John Mbadi to seek clarity on the funding issues and explore possible solutions.
The financial strain comes amid revelations by Auditor-General Nancy Gathungu that at least 6,390 companies have failed to deduct and remit the mandatory 1.5 per cent Housing Levy. According to the report, although the Kenya Revenue Authority collects the levy, it lacks enforcement powers due to legal gaps in the Affordable Housing Act of 2024.
Enforcement responsibility lies with the Affordable Housing Board, which does not have access to taxpayer data, creating widespread non-compliance. Some companies have reportedly failed to deduct the levy, while others have withheld remittances.
Despite collecting Ksh73.19 billion by June 2025, the programme has delivered only 3,611 housing units, far below its annual target of 200,000 units. Additionally, Ksh45.48 billion remains locked in Treasury Bills, raising further concerns about efficiency and fund utilisation.
The programme has also taken a hit from external financing challenges. Earlier this year, the World Bank scaled down its planned commercial financing for Kenya’s housing and reform programme by nearly two-thirds. Expected contributions from lenders have dropped from Ksh116.12 billion ($900 million) to Ksh46.45 billion ($360 million).
With funding gaps widening, staffing constraints persisting and compliance issues mounting, questions are now emerging about whether the ambitious housing programme can meet its targets and deliver on its promise to Kenyans.
Source: Kenyans.co.ke
