Government to ease long-term funds deficit

Nov 19, 2007

THE Government is looking at ways of easing the shortage of long-term finance, investment state minister Prof. Semakula Kiwanuka has said. “The Government is aware of the need for this financing and will seek ways of addressing it,” Kiwanuka said at the commissioning of the Katatumba Suites on

By Jude Katende

THE Government is looking at ways of easing the shortage of long-term finance, investment state minister Prof. Semakula Kiwanuka has said. “The Government is aware of the need for this financing and will seek ways of addressing it,” Kiwanuka said at the commissioning of the Katatumba Suites on Colville Street, Uganda’s first private condominium project.

Kiwanuka applauded Bonney Katatumba, the chief executive of Katatumba Suites, for the investment and urged more banks to support local investors.

The East African Development Bank (EADB), Centenary Bank and dfcu Bank supported the project. EADB gave Katatumba a $1m (sh1.6b) loan.

Katatumba said his initial plan was to offer affordable apartments for sale but no bank was able to finance potential buyers with more than four years’ finance.

Others who helped him in service provision include private moneylenders, Biplous, African Artists, Mega Computers and Embassy Supermarket.

Katatumba, who is also the Honorary Consul to Pakistani, said lack of credit inhibits development.

“It is difficult to borrow money and put up a project like this. Let’s compete with Japan. Japan, with one of the best economies, offers property development finance of up to 100 years. This is because a development like this is a pride to the country.”

“Why should I be penalised to pay for it alone in two-three years? Honourable minister, if you want the country to develop faster, financing must not only be available, but must also be affordable,” Katatumba said.

“It took me five years to plan these condominium units that will revolutionalise investment financing. It will involve smaller earners and ease investment in the new East Africa economic region.”

He disclosed that the property was initially valued at $2.3m(sh3.6b) but after “condominisation,” the value shot to over $8m (sh13.4b).

After completing the third tower, the value will increase to $10.5m (sh17.6b).

Katatumba said condominium properties ease bank borrowing by mortgaging proportionate security to the amount of the money borrowed which reduces risk exposure.

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