Govt in Ksh9.2 Billion Deal to Build Affordable Houses on a PPP Model

In Summary

• Private hospitals will suspend SHA and MAKL services until the government clears pending payments of more than Ksh30.9 billion or provides payment guarantees.
• Over 843,000 university students risk dropping out due to a Ksh119.8 billion funding deficit.
• The government aims to raise Ksh9.2 billion for affordable housing in Athi River through a PPP model.
• Thousands of elderly Kenyans risk missing their Inua Jamii stipends due to ID-related registration issues.
• The Galana Kulalu Project is set for expansion with a Ksh104 billion investment from the UAE.
• The higher education sector is set to experience a Ksh122.1 billion budget shortfall in the next fiscal year.

The government plans to raise Ksh9.2 billion in private funding to construct 2,320 low-cost rental units in the first phase of the Athi River Affordable Housing Project, as part of a broader plan to mobilise Ksh70 billion through public-private partnerships (PPP) in the 2025/26 financial year. The project, set on 23 acres owned by the National Housing Corporation (NHC) in Mavoko, aims to deliver 10,500 houses in three phases, with 5,490 units targeted in the first phase. The Business Daily reports that developers will build both affordable and market-rate units, with a portion handed over to NHC upon completion, while also installing and maintaining supporting infrastructure.

The Rural Urban Private Hospitals Association (RUPHA) will be suspending healthcare services for patients covered by the Social Health Authority (SHA), effective Monday, February 24, 2025, due to outstanding payments. However, hospitals will continue treating patients who had appointments before this date, ensuring no disruption for those already admitted or with prescheduled outpatient visits as reported by The People’s Daily,. Emergency cases will still receive care, and patients will be referred to other facilities if necessary. The association has advised hospitals to handle communication professionally, avoiding public notices or social media posts, with RUPHA taking charge of all external communications. The exact amount owed to the hospitals is unclear, with RUPHA suggesting the figure of Ksh30.9 billion may be an understatement. Legal and arbitration efforts will be escalated to recover the unpaid claims, and RUPHA remains open to engaging with the government if payment issues are resolved. 

About 843,623 university students risk dropping out due to a Ksh119.8 billion shortfall in higher education funding, affecting grants, scholarships, and loans. The People’s Daily reports that documents tabled before MPs show that only Ksh40.49 billion has been allocated against the required Ksh77.58 billion for the New Funding Model (NFM) and Differentiated Unit Cost (DUC) for public and private universities. The Higher Education Loans Board (HELB) also faces a Ksh34.4 billion deficit, putting 474,814 students at risk of missing financial aid. Higher Education Principal Secretary Beatrice Inyangala warned that the funding gap threatens students' access to education and the financial stability of universities, while the Kenya Association of Private Universities (KAPU) has threatened legal action over pending arrears of Ksh47.1 billion. Meanwhile, Auditor General Nancy Gathungu has raised concerns about flaws in the Means Testing Instrument (MTI) used to assess students' financial needs, delays in fund disbursement, and inclusivity issues. The High Court has declared NFM unconstitutional for being discriminatory and shifting the government's responsibility to parents, casting further uncertainty on university funding.

In a report by The Star, Kenyans should prepare for increased taxes in the 2025/26 financial year as the government reduces borrowing to fund a record-high Ksh4.2 trillion budget, up from the current Ksh3.9 trillion. The Treasury has set a higher tax collection target of Ksh2.8 trillion, up from Ksh2.6 trillion, with the bulk of spending allocated to recurrent expenditure, including salaries. The budget deficit stands at Ksh831 billion, which the Treasury aims to cut by reducing borrowing while focusing on revenue collection. Parliament is expected to approve the spending plan, which could see tax increases affecting payslips and basic commodities.

Thousands of elderly Kenyans are struggling to access their monthly Ksh2,000 Inua Jamii cash transfers due to registration challenges linked to outdated or missing national IDs. Some have been mistakenly listed as deceased, while others face SIM card registration issues due to having seven-digit ID numbers. The government’s move to disburse funds exclusively through mobile money wallets has worsened the situation, leaving many stranded without access to their stipends. The Daily Nation reports that beneficiaries across the country, including Murang’a, Kapenguria, and the Coast, are unable to receive their payments, forcing some to make long and exhausting trips in search of help.

The Galana Kulalu Food Security Project is set to receive a Ksh104 billion investment from UAE-based Al Dahra Group, expanding irrigation beyond 200,000 acres, as reported by The Standard. Al Dahra will develop 180,000 acres, while Selu Ltd targets 20,000 acres, adding to the existing 10,000 acres under the National Irrigation Authority (NIA). This Public-Private Partnership (PPP), aligned with President Ruto’s development agenda, includes constructing the Galana Dam to support 350,000 acres for food production. The agreement, signed in the presence of President Ruto and Water CS Erick Mugaa, aims to boost food security, reduce imports, and increase exports under Vision 2030 and the Bottom-Up Economic Transformation Agenda.

The State Department for Higher Education and Research faces a major funding shortfall of Ksh122.1 billion for recurrent expenditure in the 2025/2026 financial year, with only Ksh142.3 billion allocated against a requirement of Ksh264.4 billion. Additionally, the development budget faces a Ksh9.6 billion deficit, receiving just Ksh3.7 billion instead of the required Ksh13.7 billion, potentially affecting key infrastructure and research projects. This comes after the department received Ksh120.4 billion in the 2024/2025 fiscal year, with Ksh119.2 billion for recurrent expenditure and Ksh1.2 billion for development, as reported by Capital Business.