<\/p>\n
Kenyan President William Ruto\u2019s plan to build 200 000 housing units a year is facing a funding squeeze that\u2019s resulted in stalled projects, cost overruns and delays, according to a lawmakers\u2019 report.<\/p>\n
The 1.76 trillion shillings ($13.6 billion) affordable housing project pipeline has spent 198 billion shillings since it began in 2023, according to the Parliamentary Budget Office.<\/p>\n
By the end of June, 176 of the projects \u2013 or 15% of ongoing construction \u2013 were no longer making progress as funding lagged contractor payments, according to the report. The housing projects should be completed by 2032.<\/p>\n
\u201cThis funding shortfall is likely to expose the affordable housing program to more fiscal and operational challenges since it will be unable to support an uninterrupted implementation path across the entire portfolio,\u201d according to the agency that advises lawmakers on budget matters.<\/p>\n
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Hurdles include \u201cstalling of projects due to lack of funding, project cost overruns due to penalties for delayed payments to contractors and escalation in construction input prices due to delayed construction periods.\u201d<\/p>\n
The funding shortfall risks puncturing Ruto\u2019s build-out of apartments, hostels, slum upgrades and markets, whose completion may go a long way in shoring up his support ahead of elections next year in which he\u2019ll be seeking a second term.<\/p>\n
A funding hole of 118.3 billion shillings is slightly above half of what the government requires in the current fiscal year. That\u2019s despite an unpopular 3% housing levy on payslips that\u2019s collected 205.7 billion shillings since rollout in 2023, according to the report.<\/p>\n
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Authorities should ring-fence money from that housing levy for the projects and prioritise developments near completion so it can unlock additional revenue from sales, the budget office said.<\/p>\n
The agency also warned against shifting 45.9 billion shillings worth of energy and petroleum-sector projects from direct budget financing to its newly created National Infrastructure Fund. That move risks delaying those projects as they may require approvals from external funders, fresh commercial viability reviews and restructuring of existing contractual agreements.<\/p>\n
Given the fund is still at the formative stages, \u201cthese projects may stall as they wait for the review leading to project cost overruns due to penalties for delayed payments to contractors and commitment fees from approved, but undisbursed development financing from lending agencies,\u201d it said.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Kenyas #14bn #housing #push #faces #financing #strain<\/p>\n","protected":false},"excerpt":{"rendered":"
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