Aqute's Update

The Kenyan Constitution currently limits the President to a maximum of two five-year terms. This two-term limit has been in effect since 1992 and was upheld in the 2010 Constitution. There is significant public support for this limit, with a 2019 Afrobarometer survey finding that 78% of Kenyans endorse it. The survey also found that 81% of Kenyans support a minimum age requirement for presidential candidates and 85% support a maximum age.

Despite this public support, there have been multiple attempts to amend the Constitution and remove or extend presidential term limits.

• In November 2022, Fafi MP Salah Yakub proposed removing the term limit entirely and replacing it with an age limit of 75 years. This proposal was met with strong public opposition and was ultimately rejected.
• In September 2024, Nandi Senator Samson Cherargei introduced a bill to the Senate seeking to extend the presidential term to seven years. This bill, if passed, would also extend the terms of other elected officials, including members of parliament and governors.
• Cherargei argued that a seven-year term would give the president more time to fulfill their constitutional mandate and deliver on their manifesto promises. He also claimed that the current five-year term is disrupted by frequent elections and electoral disputes.

Both of these attempts to amend the presidential term limits have been met with significant opposition.

• The United Democratic Alliance (UDA), the ruling party, has distanced itself from both proposals. UDA Secretary-General Omar Hassan called Cherargei's bill "repugnant and backward" and stated that it was incompatible with the party's policies and aspirations.
• Many critics of the proposals have viewed them as attempts to extend the rule of current President William Ruto or other members of the political elite.
• Some experts have suggested that the timing of these proposals is suspicious and that they may be a tactic to distract the public from other pressing issues.
• Opponents of the amendments have emphasized the importance of presidential term limits for ensuring a peaceful transfer of power, creating a level playing field during elections, encouraging accountability, and promoting respect for civil rights and the rule of law.

High Court has ruled that the controversial housing levy introduced in 2023 is constitutional. This decision overturns a previous ruling from November 2023 that declared the levy illegal. The levy, which is set at 1.5% of the gross salary of all Kenyan taxpayers, is intended to fund an affordable housing programme. Employers are also required to contribute a matching amount.

The levy was initially introduced as part of the Finance Act 2023, which aimed to raise over $2.1 billion to help manage Kenya's public debt of $78 billion. The Act introduced a series of tax increases on various goods and services, which, coupled with existing high inflation, caused hardship for many Kenyans. This led to widespread protests against President William Ruto's government. Further protests, spearheaded by Gen-Z Kenyans, erupted in response to the Finance Act 2024, which included further tax hikes.

President Ruto has defended the housing fund, arguing that it will facilitate the construction of homes for low-income earners, generate employment opportunities, and reduce the need for government borrowing.

A group of 22 senators, led by Busia's Okiya Omtatah, filed six petitions challenging the legality of the housing levy. These petitions were later consolidated. The petitioners argued that the levy was discriminatory. However, a three-judge bench, consisting of Justices Olga Sewe, John Chigiti, and Josephine Mongare, ruled that the Housing Levy was properly enacted and aligned with the Constitution.

The court emphasized that the National Assembly and the Senate had sufficiently engaged stakeholders, ensuring adequate public participation. The court also rejected the petitioners' claim that Section 4 of the Affordable Housing Act was discriminatory. They found that it did not infringe on Article 27 of the Constitution.

Following President Ruto's signing of the Affordable Housing Bill 2023 into law on 19 March 2024, the Affordable Housing Act 2024 came into effect. The Kenya Revenue Authority (KRA) has been designated as the collecting agent for the levy. Employers are required to declare the levy on sheet 'M' of the Pay As You Earn (PAYE) return on iTax. Payments are to be made through KRA agent banks or via mobile money using the eCitizen Paybill number 222222.

The Act defines 'affordable housing' as housing that does not cost more than 30% of a person's monthly income to rent or purchase. It also defines 'institutional housing' as housing suitable for public institutions such as universities, colleges, police and defence forces, government pool housing, and prisons.

Key provisions of the Act include:

• A 1.5% levy on the gross salary of employees or gross income of individuals not subject to the levy under gross salary.
• Exemption from the levy for employers who have contributed matching amounts to their employees' deductions.
• A penalty of 3% of the unpaid amount for each month that the levy remains unpaid.
• Allowable deductions for employer contributions under Section 15 of the Income Tax Act.
• Affordable housing relief of 15% of contributions for resident individuals, capped at KES 108,000 per annum (KES 9,000 per month).
• Establishment of the Affordable Housing Fund, managed by the Affordable Housing Board.
• Eligibility criteria for housing allocation, prioritising marginalised persons, vulnerable groups, youth, women, and persons with disabilities.
• Provision for voluntary savings towards affordable housing units.
• Restrictions on the sale of affordable housing units without prior consent from the Board.
• Appointment of national government agencies and private institutions for the development of affordable housing units.
• Establishment of County Rural and Urban Affordable Housing Committees to advise on affordable housing programmes and develop five-year investment plans.
• Accountability measures for the Fund, including audits by the Auditor-General and penalties for misappropriation of funds or assets.

The Act came into effect on 19 March 2024, with Sections 4 and 5, which govern the levy's imposition and collection, taking immediate effect. The remaining provisions are to be operationalised on a date determined by the Cabinet Secretary (Housing) through a gazette notice.

While the Act aims to address the housing deficit in Kenya, some concerns remain. For instance, sole proprietorships and other entities without employees may face higher tax burdens on their gross income. Additionally, there is potential for double taxation on incomes like interest and dividends, as it may be difficult to determine if the recipient has already accounted for the levy through employee deductions.

The lack of a definition for 'person' in the Act could also lead to ambiguity. While the Interpretation and General Provisions Act defines a 'person' as including a corporate entity, this could potentially subject corporations to the levy.

The Act also fails to provide clear qualification criteria for exemptions from the levy, leaving this to be determined by future regulations. Furthermore, the delay in operationalising the affordable housing relief for employees may cause confusion and delays in implementation.

The restriction on the sale of affordable housing units without Board approval raises concerns about potential infringement on individual property rights. The transfer of all contributions previously held by the National Housing Corporation to the Fund is also contentious, given that the collection of the levy under Section 31B of the Employment Act was previously deemed unconstitutional.

Finally, the revocation of previous regulations regarding the affordable housing levy, including the definition of 'gross pay', may create uncertainties and require further clarification from the government. The lack of clarity regarding the treatment of non-cash and discretionary benefits may also pose challenges for employers.

Despite these concerns, the Affordable Housing Act 2024 represents a significant step towards addressing Kenya's housing crisis. Its success will depend on effective implementation, transparency in the allocation of funds, and addressing the concerns raised by various stakeholders.

October 22, 2024

October 21, 2024

Note

Gachagua’s claims following his impeachment raise significant concerns about political access and authority. He alleges he was denied entry to Kwale Stadium, with Wilson Airport instructed not to allow his travel there. Additionally, he asserts that helicopter companies were directed not to provide him with services, suggesting a coordinated effort to restrict his movements and public visibility.

October 18, 2024

Deputy President Rigathi Gachagua was impeached on October 17, 2024 after two days of hearings. The motion for his impeachment was tabled by Kibwezi West MP Mwengi Mutuse in the National Assembly the previous week. 281 MPs voted in favour of the motion with only 44 voting against it. Gachagua's lawyers walked out of the Senate hearing in protest after senators voted against extending the process. This followed Gachagua's failure to show up for the hearing, which his lawyers said was due to him being taken ill.

53 out of 66 senators voted to uphold the charges against Gachagua, making him the first deputy president in Kenya's history to be impeached. The charges against him included gross violation of the constitution, undermining the president, undermining devolution, irregular acquisition of wealth, publicly attacking a judge, intimidating the acting Kemsa CEO, promoting ethnicity, and insubordination to the president. The senators voted to uphold at least five charges, including:

• Ground one of shareholding
• Ground four of undermining the independence of judges
• Ground five of the National Cohesion and Integrity Act 4
• Ground six of crimes under the National Cohesion Act
• Ground nine of gross misconduct (public attacks to NIS)

The impeachment paves the way for President William Ruto to nominate and seek approval for a replacement. Gachagua is expected to challenge the outcome of the impeachment in the courts. Gachagua had previously served as a one-term MP for Mathira before becoming Ruto's running mate in the 2022 election. Gachagua's relationship with Ruto soured while in office, with the former DP accusing the president of betrayal.

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October 15, 2024

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October 13, 2024

This episode examines the controversial Sh95.68 billion (USD 736 million) deal between the Kenya Electricity Transmission Company (Ketraco) and Adani Energy Solutions to build and operate electricity transmission lines and substations in Kenya for 30 years. The episode will explore the potential benefits and drawbacks of this public-private partnership, considering Kenya's urgent need for infrastructure development, the financial implications for Kenyan citizens, and the concerns surrounding Adani Group's history.

October 12, 2024

Introduction

On October 8, 2024, Kenya’s National Assembly voted to impeach Deputy President Rigathi Gachagua. The motion, brought by Kibwezi West MP Mwengi Mutuse, accused Gachagua of gross violation of the Constitution, gross misconduct, economic crimes, insubordination, and bullying of junior state officers. The impeachment is the first time under the 2010 Constitution that the National Assembly has voted to remove a state official from office.

The Charges: The charges against Gachagua include:

1. Acquiring properties through corrupt means
2. Practicing ethnic politics
3. Acting to undermine the government
4. Gross violation of the Constitution
5. Gross misconduct
6. Economic crimes
7. Insubordination
8. Bullying junior state officers
9. Promoting ethnic divisions
10. Corruption
11. Undermining the President and the Cabinet
12. Undermining Devolution
13. Compromising judicial independence by publicly attacking a judge

The Vote

The National Assembly voted 281 to 44 to impeach Gachagua, well beyond the two-thirds majority required.

• Gachagua's Defence: Gachagua has denied all the allegations against him, calling them outrageous and saying they are propaganda meant to tarnish his name. He claims that the assets he is accused of acquiring through corrupt means belong to his late brother and that he was simply appreciating the people who voted for him when he made comments about ethnic politics. He has also appealed to President Ruto for forgiveness.
• Gachagua's Legal Challenges: Gachagua filed a petition to block the Senate trial, arguing that the impeachment motion is premised on weak grounds and amounts to a “shambolic, unfair, and vicarious” attack against him. However, the High Court ruled that the petition should be forwarded to Chief Justice Martha Koome to appoint a three-judge bench to hear the case.
• The Senate Trial: The Senate will now hold a trial to decide whether to uphold the impeachment. If the Senate upholds the impeachment, Gachagua will cease to hold office, unless the courts direct otherwise. The Senate has 10 days to make a decision.
• Public Opinion: Some Kenyans believe that the impeachment is justified, while others see it as a political witch hunt. There have been protests in Kenya in recent months over allegations of corruption and high taxes, and some politicians have accused Gachagua of helping to organise these protests.
• The Wider Political Context: The impeachment comes amid reports that Gachagua has fallen out with President Ruto. Ruto recently sacked most of his cabinet and brought in members of the main opposition following nationwide protests against unpopular tax hikes. Some analysts believe that the impeachment is a way for Ruto to reassert control over his government.

Conclusion

The impeachment of Gachagua is a significant event in Kenyan politics. It remains to be seen whether the Senate will uphold the impeachment, but the episode has already damaged Gachagua's reputation and could have implications for the stability of Ruto's government.