The National Treasury has cut Sh13.6 billion in funding for construction of social halls, affordable houses, and slum upgrades in its newly tabled mini-budget for the current financial year ending June 30, 2025.
The State Department for Housing’s development budget for the Affordable Housing programme and slum upgrading initiatives was chopped from Sh85.2 billion to Sh71.6 billion in the current financial year on account of less donor funding received.
“The decrease is mainly on account of rationalisation of the donor component in the capital expenditures. However, there's an additional personnel emolument of Sh64.5 million to cater for actual salary requirement in the financial year 2024/25 under the current expenditures,” the Treasury said in its supplementary budget report tabled in Parliament.
The cut also affected the funding for two other programmes by the State Department for Housing, including housing development and metropolitan upgrade.
The biggest chunk was cut from the housing development and human settlement programme whose total funding was reduced to Sh71.6 billion, down from Sh77.5 billion.
This comprised a cut of the capital expenditure used for development from Sh76.7 billion to Sh68.8 billion.
Housing development encompasses construction of affordable houses in a bid to close the gap between supply and demand, slum upgrading projects, and the construction of public participation social hall centres. Urban and metropolitan development programme also suffered a hit of Sh5.6 billion from the approved estimates of Sh8.6 billion to Sh2.9 billion in the supplementary budget.
This programme involves the development and enforcement of planning and zoning regulations, integrated roads, bus and rail infrastructure, and water supply and waste management.
The cut will see the national slum upgrading projects stall for another year, with a revised down target from 100 percent completion by June to 50 percent.
The target for the construction and completion of the Oyugis and Utawala Social Halls and Kovoka market stall has also been halved to 50 percent.
Despite the slashed funding, affordable housing project completion targets have been slightly revised upwards, for example, the completion of housing units in Shauri Moyo, Nairobi from 20 percent to 25 percent.
The approved estimates for the State Department for Housing and Urban Development in the financial year 2024/25 were cut from Sh86.5 billion, comprising Sh1.3 billion and Sh85.2 billion for current and capital expenditures respectively to Sh74.9 billion under new Supplementary estimates. Gross capital estimates fell by Sh13.6 billion.
The capital grants to government agencies under the state department for housing were cut from an approved estimate of Sh18.6 billion to Sh6.45 billion, representing a reduction of Sh12.2 billion in the year to June.
Acquisition of non-financial assets took a dip from Sh64.8 billion to Sh60.7 billion.
In the period under review, the government proposed an additional Sh1.99 billion for current expenditure including Sh64.5 million for employee compensation and Sh1.93 billion for transfers to government agencies.
