Why Ruto's affordable housing numbers do not add up

Upon returning to the country from Ethiopia recently, President William Ruto, for the umpteenth time, defended the Affordable Housing Programme (AHP).

This time, he cited South Korea, Singapore, and Malaysia as examples of how a country can catapult its economy through housing.

“Singapore was a slum like Kibera. Today, 95 per cent of Singaporeans are homeowners,” he said.

“In Kenya, seven million people live in slums.”

He said 320,000 people are currently working in the affordable housing programme, where 170,000 units, another 170,000 student hostel units and 400 markets are being built.

There are 700,000 units in the pipeline, he said.

The contracts we have signed under the affordable housing programme of markets, hostels, and affordable housing are Sh600 billion, and they are under construction. And that is not money we have borrowed from anybody. This is our money because we sacrificed 1.5 per cent of our earnings,” he said.

He argued that the affordable housing programme is transforming the aesthetics of towns in the country, as the largest housing estates,citing Mandera, Kisumu, Wajir, and  Bungoma as examples.

“And it is just two years, tell me, what is going to happen in 10 years? You will not recognise this country in 20 years,” said President Ruto.

Despite these glossy figures, data from the Central Bank of Kenya and the Kenya National Bureau of Statistics (KNBS) paint a different story, particularly in the construction sector, where affordable housing falls.

From a sector that contracted in 2024, from low absorption of housing budget by the government in the same period, to fewer jobs created than what has been announced by the President, the data reveals gaps in the economic impact of the affordable housing programme.

While President Ruto now speaks of 320,000 jobs, which he infrequently refers to as “new,” the KNBS Economic Survey Report 2025 records 233,300 as the number of wage employment jobs created in 2024, a drop from 236,000 in 2023.

The private sector employed 223,400 persons, a drop from 226,300 in 2023, while the public sector absorbed 9,900, a slight increase from 9,700 in 2023.

In March this year, the number of jobs under the affordable housing programme was 244,232, according to data provided by Government Spokesperson Isaac Mwaura.

During the same period, the amount of cement consumed in the construction sector dropped to 8.5 million tonnes from 9.2 million tonnes in 2023.

Loans and advances from commercial banks to the construction sector also dropped to Sh528.0 billion from Sh602.7 billion, signalling reduced lending to the sector, which explains the 0.7 per cent contraction in the period.

When building, construction and real estate sectors are combined, the amount of loans and advances stood at Sh576.3 billion in 2024, a drop from Sh602.7 billion in 2023.

The value of completed units under the State Department for Housing and Urban Planning dropped to Sh4.0 billion in 2024 compared to Sh11 billion in 2023.

“Similarly, the number of residential housing units completed by the State Department for Housing and Urban Planning declined by 50.7 per cent to 1,655 units in 2024,” the report says.

It adds that the number of reported completed private buildings in Nairobi declined from 22,093 in 2023 to 21,807 in 2024.

“Similarly, the reported number of completed residential buildings declined from 18,084 units in 2023 to 17,920 units in 2024, while the number of reported non-residential completed buildings declined by 3.0 per cent to 3,887 units in 202,4, indicating a slowdown in the construction of commercial, office and institutional buildings,” the report says.

The KNBS report adds that the value of building plans approved by the Nairobi City County increased to Sh221.6 billion, probably approving the Sh600 billion claim by the President on the value of contracts signed on the affordable housing programme.

However, in the period, the value of reported buildings completed decreased by 2.3 per cent to Sh149.9 billion.

“The decrease could be attributed to decelerated completion rates of the already ongoing building projects,” says the KNBS report.

The report also shows that the estimated government expenditure on housing for the 2024-25 financial year was Sh86.5 billion, which is 10.6 per cent higher than that of 2023-24, an indication of the continued investment in housing development through AHP. However, the report shows the utilisation rate of budgeted funding was 32.6 per cent in FY 2023-24 compared to 86.8 per cent recorded in FY 2022-23.

During the period of high interest rates, which hit 13 per cent, the construction sector was one of the most affected as credit to the sector shrank.

Between May 2024 and February 2025, credit growth to the building and construction sector had contracted, reaching -16.7 per cent in October 2024.

However, since March 2025, the sector has recorded positive growth that saw July record a 38.8 per cent increase.

Projection by the CBK is that the construction sector will grow by four per cent this year.

“With regards to both the services and construction sectors, we do expect that the lowering of the lending rates by commercial banks to contribute to the growth (in those sectors) and in addition, the improved government spending on development in 2025 compared to 2024,” said CBK Governor Dr Kamau Thugge during the Monetary Policy Committee (MPC) press briefing in August.

Thugge said payment of pending bills would also significantly help the construction sector.

“That should contribute to increased value addition in the construction sector as contractors go back to work,” he added.