President William Ruto has announced that all civil servants in Kenya will have 3% of their salaries deducted and contributed towards a Housing Fund. The deductions are expected to assist Kenyans in accessing affordable housing. For every 3% an individual saves, the employer will be required by law to save an extra 3%.
The President announced that the government will lead in implementing this, and for all government employees, which is approximately 700,000, they will be saving 3% for them after they have made their own 3% contribution. Ruto stated that the deductions are necessary to create a fund that will assist people of Kenya to acquire homes.
Kenya currently has only 40,000 mortgages, and the administration of President Ruto aims to raise that amount to 2 million in line with the country’s economy. The government further aims to construct over 200,000 affordable housing units by 2027 to benefit 2-3 million households.
The President announced that the government had already constructed 30,000 affordable housing units in Nairobi and promised to start construction of an extra 30,000 units in Makongeni in the next two weeks. The government has a plan to construct 100,000 affordable houses every year in Nairobi.
President Ruto revealed that he was elated by the increased National Social Security Fund (NSSF) monthly contributions. The law that required Kenyans to contribute Ksh200 towards NSSF has been done away with, and contributions are now pegged at 6% of everyone’s salary. Employers are also mandated to contribute 6% of their employee’s salary towards NSSF kitty.
The President explained that they will create a big kitty that they will not have to borrow externally, and every time the government borrows from the NSSF kitty, it will repay with interest, growing the fund more.
The President made the announcement on Sunday, April 23, during a Church service at Friends Church (Quakers) in Donholm, Nairobi, where he attended. He did not disclose when the deductions will take effect.
The President’s aim is to create a fund that will assist the people of Kenya to acquire homes, and the deductions will ensure that every Kenyan can contribute to the fund. The deductions will also help to raise the number of mortgages in Kenya from 40,000 to 2 million in line with the country’s economy. The government aims to construct over 200,000 affordable housing units by 2027 to benefit 2-3 million households.
