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Capital Markets Debunking CMA with Edwin Government

Part Six: CMA Undermines the Government’s Housing Agenda

CMA undermining the government housing agenda, why every Kenyan should be concerned.

A few people have reached out to me asking, “but CMA is a government body, why are you fighting government?”

CMA Part 6 of Many seeks to demonstrate that I am actually helping the government by shining the spotlight on an organization whose conduct and policies, in the service of the vested interests of a few, ends up undermining various government agenda.

Consequently, the next few posts will illustrate how CMA, under the leadership of Mr. Shamiah, undermines various government initiatives. Let’s start with housing.

It is now almost 5 years since President Uhuru Kenyatta identified housing as a national priority. Kenya’s homeownership at 21% is low compare to, say, South Africa at 53% and Ghana at 47%. High levels of homeownership brings significant economic benefits to families and to society:

  • Families accumulate wealth overtime and get a sense of satisfaction from living in homes they own
  • Society benefits in terms of more secure neighborhoods where people feel they have long-term stakes, not to mention the economic activity created from home construction
  • Most Kenyans still live in adhoc, unplanned, substandard housing. When it rains, people have to wade thru mud to get home. Sewer and garbage smells. Water is not assured. There is no backup power. There are no sufficient lifestyle amenities.

Since announcing the initiative, many government agencies have worked to support the agenda:

  • The retirements benefits authority, RBA, has amended their rules to allow for pensioners to use 40% of their pension to purchase homes
  • The Kenya Revenue Authority, KRA, has waived stamp duty for first time home buyers, that effectively makes homes 4% more affordable and exempts certain real estate transactions from tax
  • Kenya Mortgage Refinance, KMRC is working to bring down mortgage rates to increase homeownership
  • National Construction Authority, NCA, has waived several levies
  • The State Department of Housing identified big private developers delivering significant units and is working side by side to help them solve obstacles in housing. The Alma has been a beneficiary of the department’s assistance

On the other hand, CMA has done absolutely nothing when it comes to supporting the homeownership agenda, yet development funding is the biggest problem in housing. Not a single supporting initiative over the last 5 years. If you go back to Part 5 of Many, you will notice that almost 50% of Private Offers, which they claim to be illegal and obscure, are for real estate development because regulated markets policy is not supportive of the President’s homeownership agenda. It’s bad enough that CMA has no supportive housing framework, it’s worse that they are attempting to criminalize enterprise that is innovating around their inertia.

There is ample land in Kenya, there is a huge housing deficit, Kenyans are hardworking and entrepreneurial. Kenyans deserve better housing conditions and the biggest issue is lack of development finance. The housing agenda will not take off without first resolving the obstacles to development finance in our capital markets.

The current CMA management is not open to any ideas despite several proposals from market participants. It appears focused on serving narrow interests. That is why it’s my considered view that we should get rid of the CEO of the Capital Markets Authority, Mr. Shamiah and reform the organization so that it can support government policy such as the housing agenda.

Edwin H. Dande

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