The government's Affordable Housing Programme is in limbo after Treasury Cabinet Secretary Ukur Yatani Thursday said there was money to fund the project.
Yatani said his ministry is “under very tight fiscal situation” and cannot guarantee the Ministry of Transport that it will get budgetary allocations for the project in the 2020-2021 financial year.
“The proposal from the Ministry of Transport said more money should be allocated for the programme but we may not provide anything in the next financial year. Because of that, we want to bring on board saccos,” Yatani said.
Yatani spoke when he appeared before the National Assembly’s Transport, Public Works and Housing Committee. His Transport counterpart James Macharkia was present.
Yatani, however, said the Sh5 billion that had been set aside for the programme this financial year will be disbursed to the Ministry of Transport.
Macharia had raised concern that out of the Sh5 billion, his ministry had only received Sh1 billion.
“We have given them Sh1 billion. The ministry had made a requisition for the balance and the matter is at my table. I assure that the money will be availed by mid next week,” Yatani said.
Macharia said it was regrettable that there would be no money to fund the progamme, which is one of President Uhuru Kenyatta’s legacy projects under the "Big Four Agenda".
“Given the reality that we may not have the money, we need to encourage the country to have a mortgage culture even among the low-income groups. There are about 25,000 mortgages in the country right now, which is very low. The culture needs to change,” Macharia said.
He said his ministry was encouraging investors to come in and put up houses for sale.
“We as the government will provide land, infrastructure, water and power among other things to support investors in this project. With all this provided, the cost of putting up houses might go down by up to 40 per cent. This is the strategy that we want to use,” Macharia said.
Yatani said Kenya Mortgage Refinance Company will help boost the affordable housing programme.
KMRC was incorporated in April 2018 to provide secure long-term funding to primary mortgage lenders - banks and saccos - in order to increase the availability and affordability of housing loans.
“The company will give loans to banks and saccos at an interest rate of 5 per cent. The banks and saccos will then give loans to Kenyans at interest rates of about 7 per cent,” Yattani said.
Committee chair Daivid Pkosing asked the two ministries to file a report on the progress of the programme so far and present it to them in two weeks.
“Both ministries should come together and have an agreeable way forward. It is sad that the two CSs have not been speaking from the same page,” Pkosing said.
edited by peter obuya
