Kampala — Uganda is negotiating with Kenya on the lease of its property on the Kenyan coast as Nairobi implements a new land law that prohibits foreigners from owning property near territorial borders.
An audit report flagged property owned by the Uganda government in Mombasa, warning it might lose them.
This includes a block of commercial flats held by the Uganda Property Holdings Ltd (UPHL) under the Ministry of Foreign Affairs.
In his audit report to Parliament, Auditor-General John Muwanga noted: "The new law directly affects eight of the company's property and as such, creates uncertainty on the actions of the entity and diverts UPHL from implementing its objectives and mandate. The new law does not favour UPHL and therefore has negative effects on implementation of planned activities."
Mr Henry Okello Oryem, the Minister for International Relations, said the government is negotiating with Kenya on the implementation of the land law.
"Our property in Kenya is safe. We are negotiating with Kenyan authorities on a bilateral arrangement, asking Kenya to give us an exemption in the spirit of the East African Community and the Northern Corridor integration development," Mr Oryem to this reporter.
Kenya's National Land Commission chairman Muhammad Swazuri allayed fears that Uganda could lose the property, saying, "If they will apply for renewal of their lease they will be allowed to continue owning it on leasehold terms."
"The Constitution says foreigners are only allowed to own land on leasehold terms which they renew upon expiry. I have not received any complaints from Uganda or the UPHL on this," Kenya's National Land Commission chairman Muhammad Swazuri said.
The UPHL is charged with ownership of all real estate abroad belonging to the Uganda government and any other property that the government might wish to vest in the company and to manage, hold and administer.
The Kenyan land law amendment has rattled the UPHL board, which wrote to the Finance ministry, the Attorney-General and other government agencies, informing them of the development.
Besides being a cash cow for the Finance ministry, UPHL also houses the foreign affairs consulate whose aim is to link UPHL activities to departments in the Kenyan government.
The UPHL is a limited liability company which was incorporated in November 1998 and is fully owned by the Government of Uganda.
This followed a need to retain and run strategic real estate properties abroad belonging to former government parastatals.