Uganda: NSSF Gives 10 Million US Dollars Loan to URA
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The Monitor (Kampala)
14 August 2008
Posted to the web 14 August 2008
Elias Biryabarema
The National Social Security Fund has offered a loan of $10.3 million (about Shs 16.6b) to the Uganda Revenue Authority to enable the latter construct a tower to house its headquarters.
At a press conference to announce the deal, the NSSF Managing Director, Mr David Chandi Jamwa, said their loan facility to URA was motivated by the Fund's key objective of contributing to Uganda's economic growth, beyond earning good returns on members' savings. URA will pay a 12 per cent annual interest rate on the loan and has a maximum payback period of 15 years.
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Owing to limited space at Nakawa, URA's main offices remain scattered in Kampala, Mukono and Entebbe, which has been costing the organisation an estimated Shs1.7 billion annually in rent charges. "We'll be saving an estimated Shs2b from rent expenses once this building is finished," said URA Commissioner General Allen Kagina.
Mr Jamwa said the loan security will be the property itself.
It was unclear why URA went to NSSF instead of commercial banks but it appeared the former's terms were far more favourable.
Twelve per cent is far below the market rate of commercial loans which range between 16 to 24 per cent. Ms Kagina said they intend to start construction of the office complex by year's end. NSSF has lately intensified its investments in the real estate sector.
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Currently, it is pursuing two massive residential housing projects at Lubowa on Entebbe Road and Temangalo in Wakiso District. In April this year it also signed a contract with Roko Construction Company to develop a seven storey office block on Lumumba Avenue.
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