Investors cautioned against mortgaging gov’t land for loans

Kampala, Uganda | THE INDEPENDENT | 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 – Uganda Investment Authority, Uganda Land Commission, and the Uganda Free Zones Authority – Betty Amongi, the Minister of Lands and Urban Development said all land leases must have a provision prohibiting investors from using government land in the banks.

“Uganda Land Commission, Uganda Free Zones 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 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 an amendment to the lease agreement effected.

Investors usually receive government land on a lease basis as an incentive to invest in Uganda. Government has realized, however, that many are using it as collateral in the bank, putting government property at risk of being taken in case they fail to pay back.

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