Sh80 billion Ruto-Sakaja to be funded through Housing Levy

The much touted Sh80 billion deal signed between the national government and Nairobi County Government will be funded through the Housing Levy.

Officials aware of the plans said president William Ruto had ordered housing Principal Secretary Charles Hinga to ensure the needed finances are available for implementation of the plans.

“Teams have been set up to come with budgets for various programs to be implemented. The rest will follow but the money is coming from the Housing Levy,” said a source aware of the plans.

The program is supposed to run for a year.

The Affordable Housing Levy is a statutory contribution introduced under Kenya’s payroll legislation.
It aims to fund the government’s affordable housing programs and applies to both employers and employees. Contributions are calculated as a percentage of gross monthly salary, and remittance is done via the taxman portal.

Employers are responsible for deducting the levy from employee salaries and remitting it alongside other payroll taxes.

Nairobi Governor Johnson Sakaja had explained how the deal signed with the national government will be implemented.

This came after he chaired the first implementation committee meeting under the cooperation agreement between Nairobi City County and the National Government, setting the stage for the operationalisation of a multi-billion-shilling development programme aimed at transforming Kenya’s capital.

He brought together Principal Secretaries and representatives from several national government ministries, departments and agencies under the newly established Joint Steering Committee (JSC) to coordinate and fast-track projects under the Nairobi Rising agenda.

At the centre of the cooperation framework is an additional Sh80 billion investment package unlocked through the agreement between the county government and the national government, targeting critical infrastructure gaps that have long hindered the growth of the capital.

He said the largest share of the funding about Sh33 billion will go towards sewerage and sanitation infrastructure, a sector considered key to cleaning up Nairobi’s rivers and expanding access to sanitation services.

“The investment will fund the construction of two parallel 27-kilometre trunk sewer lines along the Nairobi River corridor, a new sewer treatment plant capable of processing 60,000 cubic litres of wastewater daily, and expanded last-mile sewer connections to households. An additional Sh15 billion has been earmarked for long-term sewer expansion across the city. This will also help address drainage challenges and bring visible change,” Sakaja explained.

Another Sh8.7 billion will be invested in roads, bridges and drainage systems, aimed at improving mobility and addressing the flooding challenges that have affected several parts of the city during heavy rains. Part of the allocation includes Sh2 billion to fast-track completion of roads under the Kenya Urban Roads Authority.

“Energy and lighting infrastructure will receive Sh8.5 billion, including Sh3.7 billion for the installation of 50,000 new street lights across Nairobi, a move expected to enhance security and extend economic activity at night. The programme also sets aside Sh1.5 billion for transformers and last-mile electricity connections to reduce the cost of power for low-income households, as well as Sh3.3 billion for prepaid metering, transformers and lighting in informal settlements,” he added.

In the water sector, Sh5.1 billion will be invested to address chronic supply shortages.

The funding will support upgrades at the Ng’ethu Water Treatment Plant and the development of the Gigiri–Shauri Moyo water evacuation corridor, which will improve water distribution across the city.

Solid waste management will also receive a boost through a Sh6 billion package, combining Sh2 billion from the national government and Sh4 billion from Nairobi County to strengthen waste collection and disposal systems.

The agreement further includes institutional reforms aimed at enhancing security in the capital, including the establishment of a Nairobi Metropolitan Police Unit, expected to be operational from May 1.
The unit will get about Sh1 billion for operations.

For Sakaja, the deal is expected to accelerate implementation of the Nairobi Rising agenda, positioning the capital for improved service delivery, modern infrastructure and stronger economic growth.