Doublespeak: Puzzle of leaders who supported Uhuru's housing levy and now oppose Ruto's

Doublespeak: Puzzle of leaders who supported Uhuru's housing levy and now oppose Ruto's

A side-by-side image pf former President Uhuru Kenyatta and his successor, President William Ruto. PHOTO | COURTESY | OFPP/PCS

Over the past month, Kenyans have partaken in the heightened divisive political talks elicited by a proposal by government to introduce a Housing Fund levy that wants employees to pay 3 per cent of their monthly salaries to the government for building affordable houses.

The government has had a difficult time convincing Kenyans to welcome the controversial proposal with open minds, amid harsh censuring from the opposition.

President William Ruto has innumerably said that the project will be a win-win because it will allow Kenyans to acquire property and also create employment opportunities for Kenyan youth.

Kenyans and the opposition have however questioned President Ruto on why the contribution should be mandatory, arguing that it would increase the tax burden.

Opposition leader Raila Odinga has opined that the contribution be made voluntary just as ex-President Uhuru Kenyatta did in his tenure while also pushing for the Affordable Housing scheme in his Big Four agenda.

Amid the wrangles, there is a striking observation on the shift of goalposts by political leaders who backed the proposal during former President Uhuru Kenyatta’s term but are now resisting it under Ruto.

In 2018, just a few months after Uhuru was re-elected into office, he said that Kenyans will be needed to contribute 1.5% of their salaries to the housing fund which was likewise met with contention from Kenyans and a section of government.

The fund, dubbed the National Housing Development Fund, was to help the government realise its goal of delivering 500,000 affordable housing units countrywide in five years (by 2022).

At the time, Uhuru argued that the programme would help avert the poor housing crisis that was swiftly sprouting in parts of the nation.

"What we are saying is your contribution is helping you become a homeowner. We are living in a scenario where as a county since independence we have less than 500,000 mortgage holders," said Uhuru during a joint media interview in 2019.

"We have to build a culture where somebody is able to say I know I can borrow for 20 years because I know I have gone to school and I have 20 or 30 years of work life then I can have an affordable mortgage."

He added: "If we want Kenyans to be homeowners we must develop and build products that make that possible."

After a back-and-forth tussle in Parliament and in the courts, Uhuru announced that the contribution will be made voluntary

“The implementation of the Housing Fund Levy as a mandatory contribution, for both employees and employers, has at every turn, been fraught with an avalanche of legal hurdles and obstacles,” he said in his Jamhuri Day speech.

“In this regard, and to ensure that the implementation of the programme is not derailed any further, I hereby direct and order that The National Treasury, the ministry responsible for Housing moves to Parliament, a revision to the legal requirement in respect to the Housing Fund Levy, to make the contribution voluntary, with immediate effect.”

The decision, despite being a huge relief for Kenyans, shattered the realization of Uhuru's Big 4 agenda where the levy was included as a key plank.

At the end of his term, only about 13,000 units had been constructed.

Azimio la Umoja One Kenya coalition leader Raila Odinga was also among those who backed Uhuru's ambitious plan of providing affordable houses.

While traversing the nation in a bid to woo Kenyans to elect him as President in the 2022 campaigns, Mr. Odinga stated that he will revive the plan because he believed it had the potential to be achieved.

"That was a very good policy, I want to revive it, where an employee will be contributing 1.5 per cent and the employer 1.5 per cent that will go into a pool of funds that can enable us to roll out massive housing development in our country," he said.

Mr. Odinga has now blamed government for its plan to tax Kenyans, arguing that the government is subjecting the country’s citizens through “a mere charade and a gimmick.”

“This proposal does not lead to distribution of income. It does not combat poverty. Instead, it seeks to manufacture and distribute poverty. This proposal does not spur economic growth or generate wealth so that every family in this country can have opportunities. It traces and kills those opportunities,” he said.

On the flip side, however, the proposal was also opposed by some of the leaders who are now sitting on the other side of the political table.

Prime Cabinet Secretary Musalia Mudavadi was among those who fingered the then government for overtaxing citizens, terming the fund as insensitive.

"The money that is expected to be collected looks disproportionately larger than the cost of housing even in these bad times because you are taxing an already overloaded worker," he said then.

"It is also unlawful. This worker has already been burdened with just about the highest income tax in the world."

Now in government, Prime CS Mudavadi is at the forefront of championing for the levy, urging Kenyans to brace for tough economic times as the administration fixes the sorry state of the economy.

President Ruto, on his part, faulted the Uhuru-led administration for making a political truce with Mr. Odinga then, claiming that it impeded the government from focusing on delivering its promises to Kenyans. 

He claimed that he was hijacked in working with his former boss, vowing to oversee Uhuru's legacy since he pioneered the Big Four plan.

President Ruto has now doubled the levy deduction to 3% from the 1.5% that had been proposed during Uhuru's tenure.

The State aims to build around one million homes in five years, with an average of 200,000 homes a year.

The contentious proposal has been included in the proposed Finance Bill, 2023 which was published on April 28 and presented before the House on May 4, 2023.

The Bill is pending Parliament's scrutiny to be given a greenlight.


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