DORMANT LAND REPOSSESSION RUNS INTO CHALLENGES

Minister for Lands, Housing and Human Settlement
Development, Mr William Lukuvi.

The ongoing exercise of repossessing dormant land in the country has begun to encounter challenges.

It has been discovered that most owners of the abandoned land have used the farms as collateral to access trillions of shillings from financial institutions.

However, the government yesterday said that plans were underway to meet with bankers to inform them about its stand of holding them accountable in case they will provide loans for land which will not be developed.

The Minister for Lands, Housing and Human Settlement Development, Mr William Lukuvi, revealed this yesterday before the Parliamentary Committee on Lands, Natural Resources and Tourism when responding to various issues raised by the committee members on idle land.

Mr Lukuvi said that he has a list of farms owned by famous people who used them as collateral and but they abandoned them. “I have the list of owners who have abandoned their farms. Most of them are famous in the country.

They have used the farms to obtain loans from the banks and invested the money in other businesses, leaving the land undeveloped,” Mr Lukuvi observed. He noted that if the money obtained through the farms could be invested in agricultural activities, it could highly boost the sector.

Mr Lukuvi cited one of the farms in Moshi, saying that it has been used to obtain 16 million US dollars eight times but the money has been spent on other activities, which do not relate to agriculture.

“Most businessmen who own chunks of land do not intend to develop it but use the asset to obtain capital for investing in other businesses,” Mr Lukuvi pointed out.

He said that following such situation, the government has failed to repossess the farms because they are under the banks that have in the first place issued the loans to respective owners - and if repossessed, most of the financial institutions will be seriously affected.

Mr Lukuvi noted that there were some farms, which have been confiscated by banks and sold to other people after the owners failed to repay the loans. He said his ministry was currently planning to meet with the respective financial institutions to discuss the best way of addressing the matter.

“Generally, all the loans obtained from the financial institutions through the farms have been registered at the treasury, therefore, we cannot just repossess the farms without observing the law,” Mr Lukuvi said.

He, however, cautioned financial institutions, which provide loans by using land as collateral because the government will deal with them if the farms will be left undeveloped.

Earlier, presenting the report, the Commissioner for Lands, Ms Mary Makondo, said that according to the Land Act of 1999, the ministry directed all regional commissioners to submit reports from their respective areas on the development status of the farms.

Daily News