Govt issues new guidelines on mortgaging land for investment

Sep 23, 2020

Financial institutions shall formally request for consent from the government in respect of mortgaging government land

The government has issued new measures to both local and foreign investors on mortgaging government land in relation to investments.

The Minister for Lands, Housing and Urban Development, Beti Kamya, said the government has come up with stringent guidelines on mortgaging government lands.

She said investors who fail to comply with new government guidelines on mortgage risk losing the proposed investments.

Addressing journalists at the Uganda Media Centre, Kamya said the covenants and conditions came after the government realised that the process of mortgage is being abused.

"For an investor to qualify to mortgage government land, they should have developed at least 60% of the declared investment capital and needs funds for completion or expansion of the investment," Kamya said.

Kamya said financial institutions shall formerly request for consent from the government in respect of mortgaging government land by investors and government ownership shall remain with the government.

She said the required 60% of the total value declared investment capital shall be determined by the office of the chief government valuer or any other independent accredited valuer whose report shall be examined and approved by the government chief valuer.

"In case both the leasing authority and financial institutions fail to identify a new investor for the same land use, the government may change the land use in accordance with the physical planning Act to attract a new investor," Kamya said.

Kamya noted that leasing authority and financial institutions shall concurrently source for a new investor on similar terms and conditions of the lease agreement.

"Certificate of mortgage addressed to specific financial institutions shall be issued within one month after the leasing authority is satisfied that the investor has complied with the covenants (agreement) and conditions," Kamya said.

She said the guidelines are in line with the government policy of private sector-led economy.

Kamya further explained that the government embarked on a rigorous programme of mortgage to attract investors through various incentives by offering land to prospective investors who present business plans that are in line with government plans.

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