Compulsory acquisition in Uganda: constitutional guarantee, statutory process and the gap with lender standards

1. The constitutional and statutory frame

Uganda's constitutional settlement vests land in the citizens and recognises four tenure systems: customary, freehold, mailo and leasehold. Compulsory acquisition by the state is permitted for public purpose, subject to a guarantee of prompt payment of fair and adequate compensation prior to the taking of possession. [1] The four tenure systems and the compensation machinery are given effect by the Land Act, Cap. 227. [2]

That guarantee — prompt, fair and adequate, and prior — is more demanding than it is often treated as being. Its three elements are distinct: adequacy concerns the amount, promptness concerns timing, and the requirement that payment precede possession concerns sequence. Projects that pay adequately but late, or that take possession pending resolution of disputed claims, are not in compliance merely because the sums are right. [1] The sequencing element has been the contested one politically: the 2017 proposal to amend Article 26, so that a disputed award would not delay the State taking possession, would have removed precisely this protection. [3]

2. Valuation and the district rate system

Compensation assessment operates through a system in which district land boards establish rates for crops and non-permanent structures within their jurisdictions, with valuations subject to approval by the Chief Government Valuer. The statutory heads of assessment sit in section 77 of the Land Act, together with the disturbance allowance of 15 percent — 30 percent where less than six months' notice to give vacant possession is given. [2] The architecture is sensible: local rate-setting reflects local conditions, and central approval provides consistency and a check on the acquiring authority's self-interest.

Two practical problems recur. District rates are updated irregularly, so a schedule in force may substantially lag actual replacement costs, particularly during periods of inflation. And rates set for a district may not reflect the conditions of a specific locality within it, especially where a project has itself moved local prices.

Because rates are applied to enumerated quantities at scale, both problems propagate systematically rather than randomly, affecting whole classes of claimant identically.

3. Where lender standards go further

Four divergences matter operationally. National law compensates recognised interests; lender standards extend assistance to occupants without recognisable legal claim, so a project satisfying national law entirely may still owe assistance to informal occupants under its financing agreements.

National valuation practice does not merely permit depreciation; section 77(1)(b) directs it, valuing rural buildings at depreciated replacement cost and urban buildings at open market value. [2] Replacement cost as required by lenders is calculated without any deduction for depreciation, so that the claimant can acquire an equivalent asset. [5] For a depreciated rural structure the two measures diverge by the whole depreciated amount. Livelihood restoration as an outcome obligation has no direct national-law equivalent — the statutory scheme is compensatory rather than restorative. And lender standards require an accessible project-level grievance mechanism operating alongside, not in place of, the statutory objection and appeal routes. [4] The World Bank's framework imposes an equivalent set of obligations through its own standards, so a project financed from more than one source is reconciling three regimes rather than two. [6]

4. Complementary, not conflicting

These divergences are additive rather than contradictory. Nothing in the lender requirements prevents compliance with national law; they impose obligations beyond it. The compliant position is therefore the union of the two, and a project that treats the CGV-approved valuation as the totality of its obligation has satisfied one regime and not the other.

The genuine difficulty is procedural. Statutory processes have their own sequences and timelines, and the project's safeguard instrument must be designed to run alongside them rather than duplicating or contradicting them — most visibly where a statutory objection process and a project grievance mechanism are both live on the same dispute, and a claimant must be told clearly which route preserves which rights.