Reinstatement of Nema Fees Sparks Backlash From Builders

A decision by the Kenyan government to reintroduce levies charged by the National Environment Management Authority (Nema) has angered builders who say the move will raise the cost of projects and hurt the State’s affordable housing initiative.

According to the Kenya Property Developers Association (KPDA), the reinstatement of environmental impact assessment (EIA) and related fees will make it difficult for builders to deliver on the affordable housing agenda.

This, KPDA says, will worsen matters for property developers who are already struggling with skyrocketing prices of building materials amid a global economic fallout from Russia’s invasion of Ukraine.

“We, therefore, would like to urge the Government of Kenya to rescind this decision that is anticipated to worsen the already unsustainable cost of construction,” KPDA chairman Ken Luusa said in a press statement on Tuesday.

On Monday, Nema notified the public of the reintroduction of the EIA processing and monitoring fees; strategic environmental assessment process and monitoring fees; and environmental assessment experts registration and licensing fees effective June 1.

Sh10,000

The EIA processing and monitoring fee is equivalent of 0.1% of the total project cost – with a minimum assessment fee of Sh10,000.

This means developers will now pay between Sh10,000 and Sh40 million for environmental audits, depending on the risk levels of their projects.

In November 2016, the government scrapped these charges in an effort to lower construction costs and fast-track the development of affordable housing.

The removal of the EIA licence processing fee, Nema’s main source of revenue, left the State agency in a terrible cash position – which caused it to reduce its staff count to less than 450 against a required 1,500 personnel.

This weakened Nema’s ability to enforce compliance with environmental laws.

It also shifted the burden of sustaining the agency to the State, which later proved unsustainable – causing the Cabinet to reinstate the fees in July 2021.

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