National Land Commission (NLC) Chairman, Mr. Mohammed Swazuri today laid to rest investor’s fears that land leases will not be renewed. In a meeting held between the Kenya Association of Manufacturers (KAM) and 8 other members of the commission, Mr. Swazuri said the land was an important a factor of production and should benefit the country. “The overriding principle is that no one should suffer when we are implementing these reforms. The reforms are to enhance not curtail or prohibit people to carry out their activities so that we move forward in tandem with what the constitution says. On our side we have to safeguard the interest of landowners. Parliament shall not pass a law that deprives land owners the rightful use of their land. The good thing about the constitution is that everything must be done in consultation and participation,” he said.
Representatives from KAM wanted to clarify issues related to article 65 of the Constitution. They were particularly concerned about the interpretation of the article after the Commission placed an advert in the newspapers on the 14th of June calling on all foreigners to surrender copies of their title deeds to the commission within 60 days. The advert caused jitters amongst investors and some companies even halted the process of listing at the NSE. KAM sought to find out whether there will be a guarantee of automatic renewal or extension of the old leases and when the new leases will commence.
Mr. Swazuri said the commission had been mandated to find out who owns land in the country and on what basis. “The constitutions article 65 says that foreigners can only own land on a leasehold basis capped at 99 years. It was now for us to know who are those foreigners who own land?” he asked.
The commissioners also explained that new leases will commence from the August 2010 when the new constitution was promulgated and will be issued for a maximum period of 99 years. People with old titles whether freehold or on lease, have to submit copies of their titles to the NLC so that they can get the new leases. If the lease has expired, they are eligible for an extension. However, the commission pointed out that renewals or extensions will be depend on fulfilment of conditions laid down. The commission was also in agreement with a proposal from KAM to set aside land banks for investment purposes.
Mrs. Frida Mbugua, KAM’s legal officer asked the commission to look into the practical aspects when drawing up regulations related to article 65 since many Kenyan companies are still dependent on foreign investors. She cited situations where a local company partners with a foreign company or where big companies partner with smaller companies or SMEs on procurement projects asking how such companies would be treated by the new regulations and what would happen to the title deeds which are normally used to source for capital.
She also queried the implication of this clause for companies seeking to be listed on Nairobi Stock Exchange (NSE) since shares can be bought by foreigners. The commission promised to look into all these issues before drawing up regulations.