Kampala, Uganda – Government has directed that no investors should use government land leased to them as a security to acquire loans in any financial institution.
In a letter to heads of three agencies dated July 19th 2019 – Uganda Land Commission, Uganda Investment Authority and the Uganda Free Zones Authority – Betty Amongi, the Minister of Lands and Urban Development said all land leases to investors must include a provision prohibiting investors from using government land in the banks or any financial institutions.
“Uganda Land Commission, Uganda Free Zones Authority, Uganda Investment Authority or any other government ministries, agencies and departments should not consent to any application for mortgaging government land, leased to an investor,” Amongi said.
This follows a directive on Monday June 17, 2019, by cabinet and approved by president Museveni that investors desist from offering government land as security.
The minister directed that all investors currently leased land by the government should be notified of this directive and instructed the said agencies to comply with immediate effect.
Investors usually receive government land on a lease basis as an incentive to invest in Uganda.
A member of ruling NRM government who agreed to speak to our reporter on condition of anonymity had this to say, “The attorney general should be able to advise the president on these matters before such policies are passed,” Adding that, “In a proper system, policy is designed and passed which then guides the enacting of a law. But in this case, it seems like policy is passed after law is enacted.”
However, government says that this arose from the fact that some investors are using the leased land as collateral in the bank, putting government property at risk of being taken in case they fail to pay back.