Kenya: Atwoli Reads Scam in Low-Cost Housing Plan

12 December 2018

The Central Organisation of Trade Unions has poked holes in the government's National Housing Development Fund, opposing deduction from employees' salaries before the necessary regulations and structures are in place.

Secretary-General Francis Atwoli said on Tuesday the fund meant for building low-cost houses has the makings of a scam. It is not clear what role employers and workers would play in the management of the fund, he says.

The governance structure of the fund, its implementation modalities and how companies with housing plans for their employees will be treated are also not clear, Mr Atwoli said.

MODALITIES

The fund was introduced in implementation of the government's affordable housing agenda.

Kenyans will now have to contribute to this fund beginning January 2019 after the 2018 Finance Act introduced a mandatory 1.5 per cent levy on workers' gross salaries.

The new levy is expected to come into effect upon gazettement of the regulations prescribing the requirements for qualification to the scheme.

"We have been pushing for the constitution of a tripartite board of government, employers and workers to ensure transparency and accountability of these funds. But the government has been reluctant.

"Until we know the rules of the game that will affect our 2.5 million workers, we will not allow any deductions. This will be the only way to hold the Executive accountable for their actions and or omissions in the housing plan," Mr Atwoli said at a press conference at Cotu offices in Nairobi's Gikomba area.

EMBEZZLEMENT

The fund risks being abused since the government has "resolved to eject workers and employers' representatives from the National Social Security Fund and National Hospital Insurance Fund," he asserted.

The Draft Housing Fund Regulations 2018 provide for voluntary membership for self-employed people. They also set out penalties for non-compliance on both the employers and employees.

The contributions are to be remitted on or before the ninth day of the following month. "Such funds require supervision to ensure workers benefit and to avoid embezzlement," Mr Atwoli said.

Currently, Kenya needs at least 250,000 housing units every year to meet demand. This is against the annual average of 50,000 units delivered by the government and private developers per year.

The housing levy is expected to finance the government's Big Four Agenda of affordable housing with employees who do not make use of the levy expected to get back their contribution after 15 years.

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