Skip to main content

REAL ESTATE DEVELOPMENT CAN BE KEY IN OUR TRANSFORMATION


I have been around long enough to see real estate development, or maldevelopment, lead to the sprawl that is Kampala today.

From atop the Skyz Hotel in Naguru, one can see as far as Mukono to the east, Entebbe to the South and Bombo to the north. At night the lights from traffic, streetlights and from residences makes it a sight to behold.

But we were here in 1986 when Kampala’s outer limits were Kibuye roundabout, Rubaga, Wandegeya, Ntinda and Nakawa.

The NRM did the smart thing and removed restrictions – rent controls, on real estate and spawned a real estate boom that has led to the dramatic expansion of the capital city’s boundaries to what they are today.

During the same period the government’s National Housing & Construction Company (NHCC) has not kept pace with private developers, be they individuals or companies developing a few dozen units.

"Official statistics suggest that there is a 550,000 deficit of acceptable quality housing in Uganda of which 160,000 is in urban areas. This last figure is the equivalent of almost 160 Bugolobi Flats estates!...

Clearly our small individual efforts are not keeping up with demand and there is no sign that demand will stop growing soon.

Is it possible that the private sector is fast reaching the end of road in how far they can meet the housing demand in Uganda?

I don’t think so, but I think more proactive involvement by government is required to not only bridge the housing deficit but also to scale up the real estate sector and drive the transformation of the economy.

Across the border from us in Kenya, as part of President Uhuru Kenyatta’s ambitious Big 4 plan is the intention to build 500,000 affordable housing units for Kenyans.

A promise from the last election in 2017, it’s been in design since. It will be a massive collaboration between the government and the private sector.

The government among other things will create the legal and tax framework under which it will operate, develop supporting infrastructure and create wholesale financial and mortgage institutions, while the private sector will execute the development and market it.

A rough calculation, using the cheapest unit of Ksh800,000 (sh32m) means this is at least a sh16 trillion project.

It’s a bit hard to wrap one’s mind around the numbers but even if it’s still in its conception stage, it could serve as a useful model that we in Uganda can adopt to bridge our own housing deficits.

Even assuming we just start by attempting to bridge the urban housing gap of 160,000 units the impact on our lives can be significant.

For the benefits we have to look beyond the provision of housing, which while it is the end goal is only part of the potential benefits from such a project.

"The beauty of real estate development is that, most of the inputs will come from within our borders – the labour, the cement, the paint, the tiles and even the steel. The transportation industry would also get a boost, as would many catering businesses. The ripple effect such a project would have on this economy would be huge....

In terms of jobs, workers can be skilled and retooled in a relatively short time, with skills they will use long after the initial projects have been done.

And if executed properly, may very well seed other major real estate investments around the country and accelerate the move to a middle income status country.

But clearly like in Kenya our government has got to take the lead and carry the private sector along.
The Private Sector Foundation of Uganda (PSFU) would be interested in such an initiative and be willing to help formulate the strategy and coordinate the various stakeholders required to make a success of the initiative.

The naysayers may be against government involvement warning that it may cause them to contract more debt or worse divert much needed resources from priority areas like infrastructure, education and health, but that need not be the case.

The Kenyans are pushing for a developer led financing, with government undertaking to buy all the houses once completed and will be paid by eventual owners of the houses.

Seen against the larger goal of transforming the economy a more deliberate and systematic focus on the real estate sector by government can aid in efforts to transform the economy. See housing as a catalyst and it will give the economy the Big Push.

Labels:

Comments

Post a Comment

Popular posts from this blog

WELL DONE UGANDA REVENUE AUTHORITY BUT …

Over the weekend President Yoweri Museveni commissioned the new head office of the Uganda Revenue Authority, an imposing structure that is set to dominate the Nakawa skyline for some time to come. Congratulations are in order to URA for the construction of such an aesthetically appealing building, which I hope wills set the pace for other developments not only in the area but in Kampala and even Uganda as a whole. I know the pride that comes with having completed such a massive build for the initiators and implementors. The new 22-story structure has allowed the tax man to fold back all his offices from around the city back to the head office, a move they estimate will save them sh7b annually. Using simple math the sh140b will pay for itself in 20 years. The move is seen as precursor to a government move to build a ministerial compound in Bwebajja, where all ministries will be relocated sometime in the future. I have seen comments that such actions are evidence that...
Post a Comment
Read more

THE MUKWANO I KNEW

We have lost the greatest Ugandan entrepreneur of our time, Mr Amirali Karmali, more popularly known as Mzee Mukwano. I have known Mzee Mukwano for more than 40 years and most of what I am today is due to him. And I am not alone. "He has helped countless people through school – as he did me. Helped countless more in business – as he did me. And he has been a steadfast friend and source of support to countless more – as he was to me.... I first met Mukwano around about 1977. My mother was the secretary for the chief of operations at Uganda Airlines, a man I knew only as Hamid. Mukwano had come to charter the Uganda Airlines’ Hercules plane and I happened to be around the office then. He was a short man, an unassuming man, but clearly a serious businessman who would charter the plane to bring in goods that were in high demand here. He run a popular whole sale shop in Nakasero – Egesa Commercial Agencies, a beehive of activity and the go-to place for anythin...
Post a Comment
Read more

SOROTI FRUIT FACTORY, A POTENTIAL GAME CHANGER FOR EASTERN UGANDA

On the weekend President Yoweri Museveni commissioned the Soroti Fruit Factory, which promises to change the fortunes of fruit farmers in the Teso region. "According to reports, the factory can process 129,000 tons of fruit annually or the equivalent of 3,225 trailer loads of fruit. There are 8.2 million fruit trees in the region, if each tree produces 80kg, the 656,000 tonnes resultant production will be more than sufficient to keep the factory running well into the future. Upgrades of the plant’s capacity is foreseeable very soon.... The factory’s products – packed juices, are to be sold locally and to the region. The Teso Tropical Fruit Farmers’ Co-operative has complained that they have been receiving sh200 a kg for their produce but have seen a doubling of the price to sh500 a kg by the factory. The cooperative is a 20 percent partner in the enterprise. Government through Uganda Development Corporation (UDC) owns the remainder. The factory is a $10.2mln...
Post a Comment
Read more

THE GOOD THAT CAN COME OF THE NEW UGANDA AIRLINES

I have fond memories of the Old Uganda Airlines. As a secondary school child, I took advantage of ticket concessions (my mother worked for Uganda Airlines) to fly to the UK to buy clothes and other goods for sale to my friends at school. These trips were a great adventure and served as a good foundation for the businessman I am today. It has been reported that the first two planes of the revived Uganda Airlines will be landing in the country within the month. The finance ministry has been presenting to parliament their needs to pay off deposits on the first two of six planes they are to take possession of in coming months. The project has its equal share of supporters and critics. I am a qualified supporter of the project. In business nothing is certain. We deal in probabilities. When getting into a venture we often must weigh the risks versus the returns of a project. If the risk of failure outweighs the potential profit we stay away, otherwise you are gambling...
Post a Comment
Read more

CONGRATULATIONS ON YOUR GRADUATION, ITS NOW TIME TO WORK….

Thousands of students will be graduating from their respective universities in coming days and months. Makerere, our country’s oldest university will kick off its ceremonies on January 15th and the other universities will follow. The graduates have already had a taste of the real life, having finished their studies mid last year and tried to get employed. Many know by now that the world can be harsh and unforgiving. I hope many are tightening their belts in readiness for the struggle ahead. Some may have decided to kick the tin down the road by continuing with school. And others may have given up altogether. My prayer is that there are more of the first and less of the last kind. In talking to young people, I find that what is needed is a reorientation of their minds – a mindset change. Let me share with you certain facts to help manage their expectations of the world and how they can fulfil their potential in our context. First of all, the world owes you ...
Post a Comment
Read more

NOT ONLY THE HARDWARE BUT THE SOFTWARE TOO

In the middle of September the United Nations released its annual Human Development Indicator (HDI). This index serves as an indicator of the quality of life of a country’s people by measuring the health, education, inequality, poverty and security standards. Aside from the statistical measures of development like GDP growth, this is obviously a better measure of how people are actually doing. In this year’s HDI report Uganda was ranked 162 out of 189 countries with a HDI score of 0.516. The index goes from zero to one, the nearer you are to one the better. Our score puts us in the low human development category. But as bad as that sounds we have been worse. In 1990, the earliest year that these figures were compiled our score was 0.311 even the UN recognises that we have improved 66 percent in the last three decades. According to the UN figures life expectancy has risen to 60.2 years   from 45.5 in 1990; expected years of schooling has doubled to 11.6 fr...
Post a Comment
Read more

ARE WE HELPLESS TO DO ANYTHING ABOUT THE CARNAGE ON OUR ROADS?

Recently there was a horrific crash between a passenger bus and sand laden Isuzu truck on the Masaka-Kampala highway. To look at the pictures of the aftermath it is a miracle that only two were killed and 20 injured in the accident, which it is reported was a head-on collision between the two vehicles. We don’t go a week without news of a major accident on our trunk roads. I suspect that a combination of poorly maintained vehicles, improperly trained or inexperienced drivers, driving at break neck speeds are to blame. "A few months ago, there was a suggestion that the new paved roads were not properly designed and therefore causing the accidents, but I think that is a case of poor workmen blaming their tools.... If one was to buy this argument, what about the argument that we had fewer accidents when our roads were pot holed and it would take whole days travelling journeys that now take a few hours? So, we should we go back to our potholed roads? "Accord...
Post a Comment
Read more