A Political Kenya: Latest Politics and Kenya Economy News

The Government yesterday bowed to public pressure and withdrew new charges on land transactions it had introduced last month.

The revocation puts reformist Lands minister James Orengo on the spot and throws into doubt his ability to push through the reform measures he promised when he took over the docket in April.

It is the second time the minister is being made to renege on his word his first having been an order by President Kibaki that expired land leases be renewed in the usual manner — a direct contradiction of the minister’s earlier announcement that such land would automatically be reverted to the Government.

Mr Orengo announced the reversal yesterday in Parliament, saying it is meant to give room for consultations.

It is the first time since the grand coalition was formed that a minister has had to retreat on a major policy announcement on the floor of the House, raising questions on how the decision was arrived at in the first place and whether it had the blessings of the Cabinet.

Although it comes as a financial reprieve to millions of Kenyans pressed by economic hardships, the reversal means loss of a huge chunk of funds that the ministry was supposed to raise internally to fund its Sh1.66 billion budget.

Key in the ministries budget were provisions for legal compensation payment of arrears to district tender boards.

Mr Orengo had said that the levy revision was meant to eliminate corrupt cartels in the land registration department and that revised fees would be issued after consultation with the industry players.

“The fees had been increased because they were unreasonably too low and insignificant, compared to the rigorous procedures, time and manpower involved,” Mr Orengo told Parliament in a ministerial statement.

Many observers however see the hand of intense lobbying behind the reversal.

Lobby groups such as the Institute of Surveyors of Kenya (ISK) had opposed the increment, saying it was likely to encourage illegal transactions as some people might not want to raise the higher fees.

According to experts, increment of the levies ––which had seen some doubled –– would have raised the cost of acquiring land and development in the real estate sector.

The price of land, a critical factor in real estate business, greatly determines the cost of development and it should account for 30 to 40 per cent of the value of the property.