NAIROBI, Kenya — Kenya’s affordable housing programme is facing a potential slowdown after access to Sh25 billion already raised under the Housing Levy was blocked, raising fears that more than 1,700 projects could stall if contractors go unpaid.
Housing and Urban Development Principal Secretary Charles Hinga told MPs that the funds, currently invested in short-term government securities, cannot be spent without approval from the National Treasury, despite being generated specifically for the programme.
Appearing before the National Assembly Housing Committee, chaired by Mugambi Rindikiri, Hinga said the department is not seeking new funding but authority to utilise money already collected under the Affordable Housing framework.
“Given the scope of the programme, the State department is seeking an enhanced budgetary provision of Sh25 billion under Supplementary Estimates I for the 2025/26 financial year to ensure smooth implementation. The funding will be drawn from Housing Levy investments,” Hinga said.
The PS explained that the funds were invested in 90-day Treasury Bills and are due to mature by the end of March. However, without their inclusion in the supplementary budget, the department lacks the legal authority to spend them.
“I have invested money in Treasury Bills, which are maturing, but if the Treasury does not create fiscal space in the Supplementary Budget, I will not be able to spend it even as certificates of completed works continue to come in,” he warned.
As of January 2026, about 79.5pc of the allocated housing budget had already been utilised, even as contractors continued submitting payment certificates for completed units and related infrastructure.
Hinga cautioned that failure to release the funds would delay contractor payments for at least three months, affecting thousands of workers, particularly youth employed across construction sites nationwide.
“It will be a grave mistake to stall projects at various stages across the country. We risk disrupting an economy that had started to pick up,” he said.
The standoff triggered sharp reactions from MPs, who questioned whether the funding gap had been anticipated and raised concerns over persistent staffing shortages within the department.
Hinga acknowledged the shortfall had been foreseen, noting that some officers were working up to three shifts due to unapproved staffing requests.
Lawmakers accused the Treasury of undermining one of President William Ruto’s flagship economic programmes. In a dramatic session, Rindikiri ordered a Treasury representative out of the meeting and summoned Cabinet Secretary John Mbadi and Principal Secretary Chris Kiptoo to appear before the committee.
“Treasury is sabotaging a key national project and, at the same time, the growth of the economy. This will not be business as usual,” Rindikiri said.
Hinga also disclosed that Sh2 billion under Appropriations-In-Aid has been set aside to support the issuance of title deeds, aimed at boosting the uptake of completed housing units.
However, donor-funded components of the housing and urban development programme have been reduced by Sh2.642 billion, affecting key initiatives such as the Second Kenya Urban Support Programme and the Second Kenya Informal Settlements Improvement Project.
Overall, the development budget for the 2025/26 financial year has declined slightly by Sh642.8 million, from Sh116.729 billion to Sh116.086 billion. Hinga warned that the reduction, though modest, could slow delivery of critical infrastructure and housing projects.
Public Works Principal Secretary Joel Arumonyang also told the committee that logistical challenges, including a shortage of vehicles, were hampering operations.
Members of the committee pledged to engage the Treasury further to unlock the funds and prevent disruption to a programme central to Kenya’s housing agenda and broader economic recovery.
