Housing and Urban Development Principal Secretary Charles Hinga has warned that more than 1,700 affordable housing projects could stall after the Treasury failed to allocate Sh25 billion invested by the Affordable Housing Board in Treasury Bills.
Appearing before the National Assembly Housing Committee chaired by Buuri MP Mugambi Rindikiri, Mr Hinga said the National Treasury declined to factor the funds into Supplementary Budget I for the 2025/26 financial year.
He cautioned that the State Department for Housing will be unable to pay contractors or utilise the Sh6 billion generated monthly from the Housing Levy for April, May and June 2026 due to constrained fiscal space.
President William Ruto (left) converses with Cabinet Secretary for Lands, Public Works, Housing and Urban Development Alice Wahome (centre) and Principal Secretary for Housing and Urban Development Charles Hinga (right) during an engagement with graduate interns at State House, Nairobi, on January 23, 2026.
Photo credit: Wilfred Nyangaresi | Nation
As of January 2026, the Affordable Housing Board had utilised 79.5 percent of its allocated budget, even as it continued to receive and process payment certificates for ongoing housing and related infrastructure projects nationwide.
“Given the scope of the programme, the State Department is seeking an enhanced budgetary provision of Sh25 billion under Supplementary Estimates I for the 2025/26 financial year to ensure smooth implementation. The funding will be drawn from Housing Levy investments,” Mr Hinga said.
He warned that failure by the Treasury to approve the allocation would halt projects across the country. The funds, currently invested in 90-day Treasury Bills, are due to mature, and the ministry has already written to the Central Bank of Kenya to have the Sh25 billion released by the end of the month.
However, Mr Hinga noted that even if the money is received, it cannot be spent unless it is formally appropriated in the Supplementary Budget.
“I have invested money in Treasury Bills which are maturing, but if the Treasury does not create fiscal space in the Supplementary Budget, I will not be able to spend it even as certificates of completed works continue to come in,” he said.
He added that failure to release the funds would mean contractors go unpaid for at least three months, affecting thousands of workers, particularly youth employed in the housing projects.
Mr Hinga further warned that stalling the projects would negatively impact the broader economy, disrupting momentum in a sector that had begun to recover.
“It will be a grave mistake to stall projects at various stages across the country. We risk disrupting an economy that had started to pick up,” he said.
A section of the Affordable Housing Project in Mukuru, Nairobi on December 11, 2024.
Photo credit: Evans Habil | Nation Media Group
He said that the ministry is not seeking additional funding from the Treasury but only approval to spend money already generated through the Housing Levy and invested as permitted under the Affordable Housing Act.
The Act allows the Board to invest surplus funds in interest-earning instruments such as Treasury Bills, which can be accessed upon maturity.
“We are not asking for new funds from the Treasury or Parliament—we are asking to use our own money already held in Treasury Bills. We wrote to the Treasury, and they declined,” Mr Hinga said.
Committee chairperson Mr Rindikiri accused the Treasury of frustrating the affordable housing programme hwhich is one of President William Ruto’s flagship projects and by extension, undermining economic growth.
He ordered a Treasury representative out of the meeting and directed Treasury Cabinet Secretary John Mbadi and Principal Secretary Chris Kiptoo to appear before the committee within the week.
President William Samoei Ruto commissioned the Emgwen Boma Yangu Estate in Nandi County, paving the way for occupation of the houses.
Photo credit: Pool
“The Treasury is sabotaging a key national project and, at the same time, the growth of the economy. This will not be business as usual,” Mr Rindikiri said.
Mr Hinga also noted that an additional Sh2 billion in development funding under Appropriations-In-Aid (AIA) is earmarked for titling housing projects to boost uptake.
However, donor funded components have been reduced by Sh2.642 billion including cuts to the Second Kenya Urban Support Programme (KUSP II) and the Second Kenya Informal Settlements Improvement Project (KISIP II).
As a result, the development budget for the 2025/26 financial year has decreased slightly by Sh642.8 million, from Sh116.729 billion to Sh116.086 billion.
He warned that these reductions would adversely affect the implementation of key housing and urban development programmes.
