10 years in jail or KSh20million fine for Kenya state officials who mismanage housing levy funds – PS Hinga

Stringent penalties have been instituted by the government to deter public officials from mishandling funds earmarked for the Affordable Housing project. According to Housing Principal Secretary (PS) Charles Hinga, the Affordable Housing Act mandates a fine of Sh20 million for government officials found guilty of mismanaging housing levy funds.

Speaking on Citizen TV, Hinga emphasized the gravity of the penalties stipulated in the Act, highlighting that offenders could face either a fine, a 10-year jail term, or both.

He stressed the necessity for robust legislation to curb the misappropriation of public funds, noting a prevailing trend where corrupt officials evade punishment, a trend that requires rectification.

Moreover, Hinga outlined the establishment of a supervisory board tasked with overseeing these funds, comprising diverse stakeholders, including representatives from the Central Organisation of Trade Unions (COTU), the Federation of Kenya Employers (FKE), and the Council of Governors (CoG), among others.

President William Ruto recently enacted the Affordable Housing Bill, 2023, facilitating the resumption of housing levy deductions starting this month. Under this legislation, employees will have 1.5 percent of their gross monthly pay deducted, matched by their employers.

The law extends its coverage to individuals in the informal sector, aligning with a High Court ruling that deemed the previous exclusion of this demographic unconstitutional.

Ruto underscored the multifaceted benefits of the affordable housing initiative, emphasizing its potential to generate employment opportunities, secure land for agriculture, and bolster the manufacturing sector.

The government has amassed Sh32 billion thus far through the Affordable Housing Programme, with the funds collected by the Kenya Revenue Authority. PS Hinga clarified that these funds are channeled to a designated Central Bank of Kenya account for the State Department for Housing, as per parliamentary appropriation mechanisms.

As of March 19, 2024, the account balance stood at Sh29,473,380,645.40 billion. Hinga explained that a portion of these funds, amounting to Sh2 billion, has been allocated to ongoing projects, including the construction of schools and hospitals within housing complexes to enhance accessibility to essential services.