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.
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