NAIROBI, Kenya – The National Treasury has cut Sh13.6 billion from the development budget for affordable housing, slum upgrading, and social hall construction in a revised mini-budget for the financial year ending June 30, 2025.
The move reduces the State Department for Housing’s allocation from Sh85.2 billion to Sh71.6 billion, mainly due to lower-than-expected donor funding.
This is expected to slow down key projects under the government’s housing agenda, a flagship initiative of President William Ruto’s administration.
According to Treasury documents presented to Parliament, the biggest cut was in the housing development and human settlement programme, whose budget shrank from Sh77.5 billion to Sh71.6 billion.
The capital expenditure component was slashed by nearly Sh8 billion, falling from Sh76.7 billion to Sh68.8 billion.
The urban and metropolitan development programme also took a significant hit, with its budget dropping from Sh8.6 billion to Sh2.9 billion.
This programme oversees slum upgrades, planning and zoning regulations, and urban infrastructure, including waste management and transport systems.
The funding cuts will slow down affordable housing construction and the completion of key social infrastructure.
National slum upgrading projects, which had targeted full completion, will now achieve only 50 per cent of their original goal.
Similarly, public facilities such as the Oyugis and Utawala social halls and Kovoka market stalls—originally set for completion this financial year—will only reach half of their intended progress.
Despite the reductions, some housing targets have been slightly revised upwards.
For instance, the completion rate for units in Nairobi’s Shauri Moyo estate has been adjusted from 20 per cent to 25 per cent.
While development spending faced deep cuts, Treasury allocated an additional Sh1.99 billion for recurrent expenditures.
This includes Sh64.5 million for salaries and Sh1.93 billion for transfers to government agencies.
The overall budget for the State Department for Housing and Urban Development has now been revised downward from Sh86.5 billion to Sh74.9 billion, with capital grants to government agencies suffering a major reduction—falling by Sh12.2 billion from Sh18.6 billion to Sh6.45 billion.
The cutbacks raise concerns over the government’s ability to meet its affordable housing targets, a programme that has been touted as a key driver of economic growth and job creation.
