Roads, and Housing and Urban Development accounted for more than three-fifths of the additional...
President William Ruto’s administration channelled 61 percent of the increase in national development spending into roads and housing last financial year, signalling a shift in government’s investment priorities towards highly visible projects ahead of the 2027 election.
National Treasury data shows development expenditure rose by Sh148.6 billion to Sh731.5 billion in the year ended June 2026, from Sh582.9 billion a year earlier.
Roads, and Housing and Urban Development accounted for more than three-fifths, or Sh91.4 billion, of the additional spending. The cash pumped into roads and housing rose to Sh269.2 billion from Sh177.9 billion.
Road spending increased by Sh34.9 billion to Sh139.3 billion, while housing expenditure surged by Sh56.5 billion to Sh130 billion.
The shift has made the two sectors the clearest beneficiaries of the government’s expansion in development spending as the administration enters the final full financial year before the August 2027 General Election.
The concentration is particularly striking in housing, which has evolved from a relatively small development item into one of the government’s largest investment priorities.
Housing spending has risen from Sh4.8 billion in 2022/23 to Sh9.4 billion in 2023/24, before jumping to Sh73.5 billion in 2024/25 and Sh130 billion last year. Over the four financial years under the Ruto administration, housing development expenditure reached Sh217.6 billion in June 2026.
That compares with about Sh39.1 billion spent during the final two financial years of President Uhuru Kenyatta’s administration, making housing one of the spending shifts between the two regimes.
However, unlike housing, roads were already a major development spending item under Mr Kenyatta, receiving Sh129.8 billion in 2020/21 and Sh128.6 billion in 2021/22.
Spending subsequently collapsed to Sh43.1 billion in 2022/23, the first financial year of the Ruto administration, before rallying to Sh90.8 billion in 2023/24 and Sh104.4 billion in 2024/25.
Last year’s Sh139.3 billion, therefore, represented a return to, and eventual surpassing of, the spending levels recorded during the final two years of the previous administration.
The rebound followed an early period of fiscal tightening in, which the new government sought to rationalise projects inherited from its predecessor.
President Ruto said in May 2023 that he had been confronted with about Sh900 billion in road-sector commitments in the budget inherited from the Uhuru administration.
“We have tried to cut it down; we have tried to cut some of the roads that have not started. But we still remain with about Sh680 billion that we have to manage,” Dr Ruto said at the time.
The fiscal squeeze on projects initiated by the predecessor regime had a visible effect on road construction.
Before the 2022/23 financial year, Kenya National Highways Authority (KeNHA), Kenya Urban Roads Authority (Kura) and Kenya Rural Roads Authority (KeRRA) were delivering more than 1,500 kilometres of new roads annually on average, according to government figures.
Output plunged to 495 kilometres in 2022/23 and 542 kilometres in 2023/24 as the government rationalised projects and contractors faced mounting arrears.
Construction subsequently recovered to 761 kilometres in the year ended June 2025, although this remained less than half the average annual output recorded before the change of administration.
A key intervention was President Ruto government’s decision to securitise part of the Road Maintenance Fuel Levy to raise money for settling contractors’ outstanding bills.
The government added Sh7 to every litre of petrol and diesel from July 2024, with the extra levy used to support securitisation programme and provide funds for road-related obligations.
Auditor-General Nancy Gathungu said the government raised about Sh175 billion through securitisation of the fuel levy in the first year of its implementation.
KeNHA was allocated Sh90 billion of the proceeds, while KeRRA received Sh69 billion and Kura Sh13.77 billion, according to the audit report for the year ended June 2025. “The outstanding bills had accumulated interest and penalties totalling approximately Sh20 billion,” Ms Gathungu wrote in the audit report.
The intervention has helped restore activity on stalled projects while also allowing the State to up spending on roads without relying entirely on ordinary budgetary allocations.
Housing, funded from payroll deduction at the rate of 1.5 percent and matched by employers, has generated a different political debate.
Critics, including opposition leaders, have questioned whether the programme represents the right economic priority, particularly in rural areas where home ownership is more widespread than in urban centres.
Nairobi Senator Edwin Sifuna, a prominent critic of the administration, has argued that the central problem in urban informal settlements is low incomes rather than a shortage of physical houses.
“As long as people don’t have money, there will always be slums,” he said during opposition campaigns.
His argument is that households need stronger incomes and purchasing power to escape informal settlements, rather than government simply increasing supply of houses.
The government has rejected the criticism, maintaining that Kenya faces a housing shortage of close to “2.5 million units” and that the deficit continues to grow.
Dr Ruto has also defended use of public land for affordable housing, arguing that State-owned land can either remain idle, become vulnerable to grabbing and informal settlements, or be used to provide decent homes.
“Between the national government land and county government land being used to build houses which benefit Kenyans and that same land being left to grabbers to take it or to own it, which is better?” the President posed on August 10.
“Alternatively, between that land being ‘squattered’ and slums developing into those pieces of land, and for it being converted into decent affordable dwelling for Kenyans, which is better?”
He has similarly defended the decision to sell units developed through the project rather than allot them for free.
His argument is that the housing levy and public land belong collectively to Kenyans, while proceeds from completed houses must be recycled into new construction.
The model, he says, creates a revolving fund capable of financing additional units as the government attempts to close the housing deficit.
“Until and unless each and every one of us has got a house, we will continue with a revolving fund because in any case we have a shortage of close to 2.5 million houses and that shortage is growing,” Dr Ruto said. “That is why we must continue building on whatever land that is available and selling to whoever Kenyan wants to be an owner.”
The debate comes as housing’s share of national development expenditure has increased sharply in recent years.
Roads and housing together accounted for about 10 percent of total development spending in 2022/23. Their combined share rose to 18.3 percent in 2023/24, 30.5 percent in 2024/25 and 36.8 percent last year.
Treasury expects the concentration to continue in the current financial year ending June 2027.
Roads have been allocated a projected Sh167.1 billion in fiscal year 2026/27, while Housing and Urban Development is expected to receive Sh132.7 billion.
The combined Sh299.7 billion represents about 36 percent of projected national development expenditure of Sh844.4 billion.
The allocation places roads and housing at the centre of the government’s development programme as it heads into the final stretch before the 2027 election on August 10, 2027.
The two sectors also offer unusually visible evidence of government spending.
A completed road can be seen and used by thousands of households, while housing projects provide physical developments that can be counted in units, estates and construction sites.
That visibility makes the spending politically significant even without establishing that the allocations were made specifically for electoral purposes.
Treasury data shows a change in composition of development spending during Ruto’s first term, with roads recovering their position as the biggest development spending item and housing emerging as a new heavyweight.
The political test for the President now will be whether the larger allocations translate into completed roads and occupied affordable homes before voters go to the polls in August 2027.
For taxpayers and investors, however, the bigger question will be whether acceleration can be sustained without adding further pressure to already constrained public finances.
