Lawmakers question procedure in investing housing levy billions in Treasury Bills » Capital News
NAIROBI, Kenya, May 23 – Members of Parliament have questioned the procedure used by the Ministry of Housing to invest Sh20 billion collected from the housing levy fund in Treasury Bills raising concerns on the safety of the investment.
This is after they raised jitters that the housing levy fund board might have been overlooked in the decision to invest the funds in the treasury bills.
The Housing and Planning Committee chaired by Johanna Ngeno (Emurua Dikir) demanded to see the approval documentation for the decision to invest the taxpayer’s money on Treasury Bills.
“We are not saying its wrong to invest, the question is was the procedure followed,will the monies be stuck. How long will the money stay there but the pertinent question is whether the procedure was followed,” Ngeno queried.
Lands Cabinet Secretary Alice Wahome defended the move to invest Sh20 billion of the housing fund in the investment account saying it is short term.
“Yes, I approved that the Principal Secretary can seek permission for investment through the board and forward that to Treasury CS for approval and I believe it has been approved,” said Wahome.
The Lands Cabinet Secretary allayed fears that the funds will be stuck at the investment account hindering the housing project aimed at according the electorate affordable houses.
“I think its imprudent to leave money idle even for a month. We are not investing for an year, this are just treasury bills invested for three to six months,” Wahome stated.
Housing Principal Secretary Charles Hinga assured MPs that the Sh20 billion will not be lost following the investment in the Treasury Bills.
“I want to confirm that Treasury Bills are risk free, it’s the safest. These are not bonds; bonds are where the funds take years to mature. These is short term,” he said.
PS Hinga insisted that given the legal suits surrounding the housing levy tax awaiting final pronouncement by the court,they couldn’t halt the collection of taxes transmitted to housing fund kitty.
“We cant say we will not collect the funds now because we have legal cases or because we cant utilize the funds now.Its impractical to do that,we are collecting the levy now but we made need to utilize the funds three months from now,”he said.
“Given the act gives us the leeway to invest any excess monies that we may have we proceeded to that.The issue would be why we are investing money in a non-intrest account that would have been more of a challenge,” Hinga added.
CS Wahome explained that leaving the funds idle for six months would have attracted issues with the Auditor General in the subsequent audit query which prompted the move to invest the funds.
“We would have an audit query with the Auditor if we left money
The Affordable Housing Act which came into force in March established the Affordable Housing Fund, which is intended to manage the money the government will get from the levy.
The Housing fund is derived from the mandatory monthly deduction of 1.5 percent of an employee’s gross salary which is matched by the employer.
The passed Affordable Housing Act hit a new legal hurdle after a group led by Busia Senator Okia Omtatah took it back to court seeking an order to quash it in its entirety, saying it was unconstitutional and illegal.
President William Ruto is aiming to construct 200,000 affordable housing units every year and hopes to create more than 600,000 jobs.
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