The government has still not allocated plots to developers at three sites it identified for development several years ago, because it has failed to pay compensation to the people living on the land.
The sites are Area 54 in Lilongwe, Dunduzu in Mzuzu and Matindi in Blantyre.
Lands, Housing and Urban Development Principal Secretary Bennett Nkasala told Parliament's Public Accounts Committee (Pac) that the delay had stopped the ministry from allocating the plots.
"The land we are talking about is comprised of people's gardens, people's farmland and there are even some houses, so we could not just chase out the people without compensating them," he said.
"Because we failed to pay compensation, this meant we could not proceed with plot allocations and as a result we missed the target."
A K3bn shortfall
The ministry had aimed to collect K4 billion in revenue in the 2022-23 financial year but raised only about K1 billion, which led to an audit query.
Mr Nkasala said the ministry is talking to the Ministry of Finance to secure funds for compensation.
Committee sends ministry back
Pac referred the ministry back for further reporting on the query after noting that it had not submitted written supplementary information before the meeting.
Committee chairperson Steven Malondera said members did not have enough evidence to close the matter.
"The audit query was premised on the fact that it was budgeted for and they had anticipated that kind of collection but in this case, it was never achieved, so we have also put it for further reporting," he said.
Residents say they are still waiting
Area 54 concerned citizens chairperson Biton Thuyathuya said the government has paid K2.2 billion to some affected residents.
"Although we have been engaging the government on the matter, nothing has come out for the rest of the payment," he said.
Promised billions
In March last year, then Lands Minister Deus Gumba told Parliament that the government needed K9 billion to compensate residents of Area 54, where 200 hectares had been identified.
He said a further K3 billion was needed for Dunduzu, where about 80 hectares had been identified.