Kampala — After redeeming its 830.68 acres of prime land located at Nsimbe and Seeta, Mpigi District, the National Social Security Fund (NSSF) says it will embark on the construction of low-cost house in the area within the next five years.
The managing director of NSSF, Mr Richard Byarugaba, told Daily Monitor on Tuesday that the NSSF had lost the land but they have now recovered it, which gives them the opportunity to develop it jointly with the Temangalo land.
"We have already started the construction of houses in Lubowa estate, the next one after completing Lubowa, we are going to start on Temangalo and Nismbe," he said.
Mr Byarugaba said there is a huge housing deficit in Kampala City and its surrounding towns and if the construction of the low cost houses is completed it will help in solving the problem.
The NSSF uses members fund to make investments on their behalf in government securities (treasury bonds and treasury bills), it also invests members funds in equities listed on the stock exchange and real estates. By far, the NSSF is the largest institutional investor in government securities (meaning it is the largest domestic lender to government).
In a press statement issued on Tuesday, the NSSF management said the recovery of the Fund's interest of 49 per cent of the land, means that the Fund makes a 132 per cent gain on its initial investment, going by the current market trend.
The management of NSSF stated that it is consistent with the Fund's strategy to restart all stalled real estate projects, and the National Development Plan to reduce housing deficit in Uganda.
The NSSF explained in the press statement that this development is as a result of a protracted effort by the Fund since 2012 to redeem the Fund's initial Shs8.2 billion investment in Nsimbe Holdings Limited, made in 2004, that had been written off, and convert the Fund's 49 per cent shareholding in Nsimbe Estates Limited into land, an asset that the Fund could develop in future.
On September 13, 2016, the High Court endorsed a consent judgment/decree between the Fund and Mugoya Estates Limited, the majority shareholder in Nsimbe Holdings Limited.
The judgment provides that Mugoya Enterprises Limited recognises the interests of NSSF in the joint venture company then called Nsimbe Holdings Limited.
The Fund acquires the Mugoya Estates Limited's 51 per cent share in the land at Nsimbe, Mugoya Estates Limited offers the Fund first option to purchase its 51 per cent share in the piece of land at market price
The statement says in accordance with the procurement guidelines, the Fund acquires 51 per cent shareholding in the land at Nsimbe held by Mugoya Estates Limited; upon purchase, Mugoya Estates Limited transfers the land titles, unencumbered, into the names of National Social Security Fund (NSSF), and hands over the same titles to the Fund.
In the statement, the NSSF said the above terms of the consent judgment have been adhered to, and as a result, the Fund has acquired 423.6 acres of prime land at Nsimbe at Shs21.6b, a figure informed by a valuation returned by the Chief Government Valuer.
"The land titles have been transferred into the names of NSSF, and we have taken over possession of the land. This transaction is a positive development for the Fund, its members and the country at large because it allows the Fund to redeem its initial investment and acquires a valuable asset in a prime location; it allows the Fund to recover its initial investment of Shs8.2b in Nsimbe Holdings that had been written off," the NSSF management said.