In a recent debate held by Citizen TV, Kwame Owino, the Chief Executive Officer of the Institute for Economic Affairs, voiced his strong disapproval of the National Housing Levy, a key element of the Finance Bill 2023. Owino urged Kenyans not to be deceived into accepting the plan, declaring it a poorly conceived idea that would primarily serve the interests of contractors and other beneficiaries of the contentious housing program.
“I am not an elected representative, I have no political ambitions, and I am not a government employee. Yet, I am compelled to tell you that this is a fundamentally flawed initiative,” Owino stressed.
Owino expressed concern that the government’s fervent drive to implement the housing levy program is not about addressing the housing problem in Kenya but rather about fulfilling promises made to construction contractors. He pointed out that the government has given assurances to certain parties, promising them free land for construction under the scheme.
“We have misdiagnosed the problem. Principal Secretaries have made commitments to those slated to construct these houses, even going so far as to offer them free land,” he said.
Owino argued that President William Ruto’s administration is not being completely transparent with Kenyans about the levy, hinting that the proposal is designed to benefit a select few. “The government claims to have investors ready to construct houses, yet these investors are not using their own money. They are being assured that this fund will cover their risk and remunerate them,” Owino explained.
In his view, the government could have created a more equitable situation by allowing investors to build the houses first, with guarantees given to those who successfully complete their projects. “If this fund was truly beneficial, private investors would construct the houses themselves without needing government support, knowing that there is a plan in place to purchase these houses once they are built,” he stated.
Owino added that the fund imposes an unnecessary burden on Kenyans, particularly public sector employees. He criticized the current housing mortgage scheme, which is financed by taxpayers, arguing that the real issue most Kenyans face is low income, not a lack of better housing.
“Parliamentarians claim that this plan will provide affordable housing for those who already own homes. We already have a housing subsidy in Kenya, and it is heavily funded by taxpayers. It’s designed to assist public sector employees, including members of parliament, who can take out mortgages of up to 9 million Ksh,” he explained.
Kwame Owino suggested that the government should focus on raising income levels rather than forcing citizens to buy homes that they might not need or afford. “The issue here is not housing. In Nairobi, for instance, we have a surplus of unoccupied houses. The problem is that people lack the income to afford these houses,” he said.
Moreover, Owino challenged the government’s claim that the Affordable Housing Program would create a significant number of jobs. “If the 14 million existing households in Kenya have not led to a boom in job creation, it’s unrealistic to believe that constructing 250,000 houses in one year will suddenly generate a plethora of jobs. This is simply a fallacy,” he concluded.