Treasury Gridlock Puts 1,700 Housing Projects at Risk of Stalling

The government's flagship affordable housing programme is facing a significant operational crisis, with over 1,700 active construction sites across the country at risk of grinding to a halt. Housing and Urban Development Principal Secretary, Charles Hinga, informed lawmakers on Wednesday that a standoff with the National Treasury has cut off access to Sh25 billion required to sustain ongoing works.

Appearing before the National Assembly Housing Committee, Hinga revealed that the funds, which were collected through the mandatory Housing Levy, are currently held in Treasury Bills. While these investments have reached maturity, the National Treasury has reportedly declined to authorize their release or include them in the Supplementary Budget I for the 2025/2026 financial year.

This administrative bottleneck means the State Department lacks the legal authority to spend money it has already raised. Hinga emphasized that the department is not requesting a fresh allocation from the exchequer, but rather the permission to utilize levy collections specifically intended for these developments.

The timing of this funding hitch is particularly critical as the department has already exhausted approximately 80 percent of its current budget. Without an urgent intervention, contractors on site are expected to go unpaid for at least three months, a delay that would likely trigger a total suspension of activities and mass layoffs of the youth workforce employed under the scheme.

The fiscal pressure is further compounded by a proposed Sh800 million reduction in donor funding within the supplementary estimates. This adjustment would see the total budget for the Affordable Housing Programme drop from Sh13.341 billion to Sh12.541 billion, narrowing the margins for a department already struggling with liquidity constraints.

Beyond the 1,700 active sites, the department is also grappling with human resource gaps. Hinga noted that requests for additional personnel to oversee the expanding portfolio of projects have remained unapproved, leaving the existing team overstretched as they attempt to manage the transition from construction to the handover of completed units.

Despite the current friction, the programme has delivered 3,171 units since 2022, including major estates such as Buxton in Mombasa and Mukuru in Nairobi. However, the committee heard that the momentum gained in these urban centers is now threatened by what members described as internal sabotage within the fiscal planning offices.

Vice Chairperson of the Housing Committee, Mugambi Rindikiri, stated that the team would summon officials from the National Treasury to explain why funds meant for a top-priority national project are being withheld. The committee noted that stalling 1,700 sites simultaneously would have a devastating ripple effect on the construction supply chain and the broader economy.