Housing Principal Secretary Charles Hinga has confirmed that the Kenyan government has invested funds deducted from citizens as part of the controversial housing levy into Treasury Bills. This move has drawn scrutiny from critics and raised questions about the pace of the government’s affordable housing agenda.
Speaking in response to NTV journalist James Smart’s tweet claiming that the government had placed “Housing levy BILLIONS in bonds, signalling slow down of building actual houses,” Hinga defended the decision as a prudent liquidity management strategy.
“You are better than that…why look for a headline where there is none…this is called liquidity management,” Hinga said. “Construction projects are long-term; some will take two years. You collect money today to pay a certificate in six months. The prudent thing is to invest extra liquidity and earn interest.”
Hinga argued that the Affordable Housing Act anticipated such a scenario and provided mechanisms to invest cash that is not immediately needed but might be required in a few months’ time.
“The funds are safe, earning interest as we roll out more [housing projects] across the country,” he added.
The government’s decision to divert housing levy funds into Treasury Bills has raised eyebrows among a number of Kenyans, who question the rationale behind investing money earmarked for affordable housing projects into fixed-income securities.
Critics argue that this move could potentially delay the construction of much-needed affordable housing units, thereby exacerbating the country’s housing crisis. They also question the transparency and accountability surrounding the management of these funds.
“So far you have launched units built by the previous administration. None built with the illegal and unfair deductions from Kenyans. You guys are stealing then investing in bonds. Which are long term. Definition of pure evil,” one social media user said.
“Just shut up,the levy is being taxed regularly,the money should directly go to building the so said houses,if in surplus build more houses and employ more of the so said mjengo youths,” another added.
