Why government should okay NHC loans urgently

Thursday May 27 2021
By Louis Kalumbia

Dodoma. The National Housing Corporation (NHC) has the potential for doing well if it secures loans it needs to complete its stalled projects, the Parliament heard yesterday.

Debating the Sh101.525 billion budget estimates for the ministry of Lands, Housing and Human Settlement Development for the financial year 2021/22, Special Seats Member of the Parliament (MP) Halima Mdee said the approvals would also prevent the corporation from getting into contractual challenges.

She told the House that there were threats that contractors executing the New Kawe City projects would be paid Sh100 billion if the corporation breaches its contractual obligations.

She said after reaching its Sh300 billion lending ceiling, NHC was forced to seek the approval of the Finance and Planning ministry in 2017 in order to secure funds for execution of the Sh245 billion-project.

“NHC told the Finance and Planning ministry that the project is viable and it is being implemented at a prime area, therefore requested for the permit to secure loans for execution of the project,” she told the Parliament,

She added: “But, nothing has happened since 2017 while over Sh3 billion of taxpayer’s money has been injected into the project with other people making payment for the houses even before the conclusion of the projects.”


She wondered about the government’s negligence to financially empower NHC, saying studies showed that Tanzania was facing a housing deficit of three million units and that the deficit was growing at an annual average of 200,000.

According to her, the project would be a source of property tax - thus raisin public revenues upon completion.

“Failure to implement the project’s contract will force us to pay Sh100 billion to contractors for the job not done just for denying NHC the lending permission,” she said, demanding concrete answers from the docket’s minister William Lukuvi.

The two projects under the same banner, she said, have been implemented by at least between 20 percent and 30 percent.

The earlier plan was to have them completed between 2014 and 2017, but was later extended to 2019 when it completely went to a halt.

Tabling the budget, Mr Lukuvi said in the 2021/22 financial year, NHC was expected to finalise the Morocco Square project whose implementation has reached 90 percent.

He said the corporation was now mobilising funds to revive the construction of the Kawe project, Golden Premier Residence and the Plot No. 300 Regent Estate in Dar es Salaam.

Mr Lukuvi said sections in the tenants’ contracts will be reviewed to ensure debts were collected and take court those who breached contractual terms and conditions.

“NHC will carry out a conditional assessment of its buildings and outline improvement plan in its efforts to increase their value.

“The corporation has concluded preparation of the five year (2020/21-2025/26) plan this month,” he said.

According to him, the plan was tested at the Medeli Project in Dodoma through rehabilitation of all NHC houses and that the full implementation of the project was underway in Dar es Salaam, Kilimanjaro and Mtwara regions.

Mr Lukuvi said in the corporations’ long term plan, the focus of selling 70 percent of its houses and leasing the remaining 30 percent will be changed to 80/20 lease and sale respectively.

Mr Lukuvi - the Ismani MP - said in the 2021/22 financial year there will be an amendment of two lands policies and one enactment as well as introduction of one new law, and amendment of seven others.

He mentioned policies under review as; the National Land Policy 1995, the National Policy on Housing Development 2020 and the new National Housing Policy that is in the analysis stage of stakeholders’ opinions.

“The government is collaborating with stakeholders to introduce the law on real sector supervision and development law. Other seven laws will also be improved,” he said.

He mentioned the laws as the Professional Surveyors Registration Act. Cap 270, the Village Land Act Chapter 114 and the Town and Country Planning Act Cap 355.

Others are the Town Planners Registration Act, Cap 426, the Valuation and Valuers Registration Act 138, the Land Use Planning Act Chapter 116 and the Land Survey Act Cap 324.

He instructed the government institutions and individuals that have grabbed land to return them immediately, saying there is a huge challenge in the area starting from the councils, institutions and departments.

“All compensations should be paid with immediate effect. The government’s chief valuer will be instructed to deny permission of lands compensation without providing confirmation of the available budget,” he said.

He said in the 2020/21 financial year, Sh134.7 billion loan was disbursed to 1,300 citizens, hinting that however that the fund was facing the sustainability challenge.