The Kenyan government is planning a partnership with the Multilateral Investment Guarantee Agency (MIGA), a member of World Bank Group, in a bid get investors on board for the affordable housing programme.
Housing and Urban Development Permanent Secretary Charles Hinga, told at a trade forum in Nairobi that Kenya requires KES 2.6 trillion Kenyan shillings from both public and private sources to construct one million social housing units by end of 2022.
The PS said that the government is going to partner with MIGA to provide insurance which will enable foreign denominated investors to be confident in putting their funds into Kenya’s housing market. The MIGA facility will go a long way in helping to de-risk investments that are expected in the real estate sector.
“It will also ensure that foreign investors are compensated for any equity and loans in case of political risk or changes in government housing policy that will affect their portfolio,” Mr Hinga said.
PS Hinga said that to safeguard the country’s macro-economic stability, the government would not borrow funds and burden taxpayers further but will instead partner with the private sector to construct the social houses.
Last month the affordable housing programme came under stress when the court issued an order halting the deduction of the 1.5 per cent levy to be deducted from employees towards the affordable housing fund. The court order has since been lifted.
Approximately 2.4 million salaried employees will be subjected to a mandatory contribution of 1.5 per cent of their monthly incomes towards the housing fund, the fund will be used to purchase the houses from private investors.