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Officials mismanaging housing levy funds to pay KES 20 million fine

Brenda Murungi by Brenda Murungi
March 21, 2024
in News
Reading Time: 2 mins read

The government has introduced stringent penalties for public officials found mishandling public funds designated for the Affordable Housing project.

Housing Principal Secretary, Charles Hinga, announced on Wednesday that under the Affordable Housing Act, government officials could face a fine of KES 20 million for misappropriating housing levy funds.

“The Act imposes serious penalties on anyone who is going to misappropriate the money, it is 20 million fine or 10 years in jail or both,” he said at a media interview.

President William Ruto signed the Affordable Housing Bill, 2023 into law on Tuesday, allowing for the resumption of housing levy deductions starting this month.

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The deductions will amount to 1.5% of employees’ gross monthly pay, a contribution that will be matched by their employers.

As per the new legislation, individuals in the informal sector and those without fixed salaries will also be required to contribute 1.5% of their monthly gross earnings towards the government’s flagship housing project, Kenya Kwanza.

Hinga emphasized the necessity of having transparent laws to deter the misappropriation of government funds, noting that corrupt officials often evade punishment, a situation that requires reform.

He also mentioned the establishment of a board tasked with overseeing these funds, comprising multiple stakeholders.

Some of the stakeholders on the board include the Central Organisation of Trade Unions (COTU), the Federation of Kenya Employers (FKE), and the Council of Governors (CoG) among others.

The government has so far collected KES 32 billion from the Affordable Housing Programme through the Kenya Revenue Authority.  Explaining how the collection is done, PS Hinga revealed that the money once collected doesn’t go to the main account but to a Central Bank of Kenya account for Housing.

“The way Parliament appropriated the money is what we call appropriation in aid. The money doesn’t go to the consolidated fund but to our CBK account for the State Department for Housing,” he added.’

Govt officials who mismanage housing levy funds to pay KES 20 million fine

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