Saturday, January 20, 2018

Amendments to land law to hurt economy: private sector

 

By Louis Kolumbia @Collouis1999 lkolumbia@tz.nationmedia.com

Dar es Salaam. The private sector has written a letter to the government calling for immediate withdrawal of amendments of the Land Act No 4 of 1999 due to lack of thorough participation of all stakeholders. Sources told The Citizen this week that the private sector feels that there are some clauses inserted in the amendments, which if left to pass in the new law could be detrimental to the economy.

“In fact the Tanzania Private Sector Foundation has written a letter to the minister for Lands, Housing and Human Settlements Development, Mr William Lukuvi, to request him to withdraw the Written Laws (Miscellaneous Amendments) Bill No 5 of 2017, and revert to wide-ranging consultations,” sources said.

Efforts to reach Minister Lukuvi to address the issue proved futile but The Citizen understands that representatives of the Tanzania Bankers Association were scheduled to meet the parliamentary committee responsible for Lands in Dodoma yesterday to submit their recommendations.

In particular, the private sector is concerned by the introduction of sections 120A, 120B and 120C to the Land Act No 4 of 1999 that say that bank loans taken by using undeveloped or underdeveloped land as collateral should only be used to develop that specific piece of land. Failure to do so will result in the revocation of the right of occupancy by the President.

The new sections also say the money obtained from loans whose security is land cannot be spent in investments outside the country and that no foreign bank can be given land as collateral in loans advanced to its customers.

“What is worse is that the Bill once enacted will be backdated to affect all those past mortgages that were not done according to this new law. This will not only cause havoc but will trigger an economic crisis like we have never seen before. Sectors like banking, agriculture and industries will suffer irreparably,” the sources observed.

The sources added: “The private sector does not, at all, support the amendments, and the government must reconsider for the good of the Tanzanian economy.”

The private sector is also concerned by the amendments that compel local banks and financial institutions in Tanzania to provide details as to how their customers have utilised the funds they have disbursed to them.

The amendment Bill is going for the second and third reading in Parliament in the next meeting scheduled to start on Monday. It is therefore expected to be passed into law in the same seating.

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