The Promota Magazine

Investing in Housing Development in Uganda, A Must Not Miss Opportunity

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By Amb. Agnes Kalibbala
Director for Housing- Ministry of Lands, Housing and Urban Development

The housing construction industry in Uganda is growing at about 15% annually,  contributing 13% to the Growth Domestic Product as more people and investors undertake to build homes, commercial complexes, recreational centres, educational centers and hotels.  However, these efforts, are a drop in the ocean since demand for housing still greatly out weighs supply.  More partners are needed to come on board with innovations and mechanisms to address this.

The housing situation in the country;
Uganda is urbanizing at an annual rate of about 5.6%. With a population of about 35 million people and a growth rate of about 3.4%, projections are that by 2020 the population could be 42 million.

Currently, there are approximately 6.82 million households in 6.2 million housing units with an average household size of 5.0 persons. This means that the national occupancy density is about 1.1 household per housing unit, leaving a backlog of 710,000 housing units. Of the existing 6.2 million housing units, about 900,000 housing units are substandard houses (i.e. not fit for human habitation) thus making a national housing backlog of about 1.6 million housing units. Of these 211,000 are in urban areas and 1,395,00 in rural areas.

It is worth noting that the current production of new decent housing by the players in the construction sector in urban areas is only 20,000-30,000 housing units  annually, giving a short fall of over 120,000 units per annum.

Enabling policies, strategies, guidelines and laws developed to facilitate the housing sector development in the country;
The Government has put in place a framework to encourage different players in the delivery of housing, including:-

  • The National Development Plan which prioritises housing construction and increasing the access to affordable housing for Ugandans.
  • The National Housing Policy (2012): a framework promoting production, upgrading, repair and maintenance of adequate housing for all.
  • The Physical Planning Act 2010 which declared the whole country a planning area, bringing the whole country under planning control.
  • The National Land Policy for ensuring efficient, equitable and sustainable utilization and management of land and land-based resources for poverty reduction, wealth creation and overall socio-economic development.
  • The Public Private People Partnerships (PPP) frame work developed by the Ministries of Finance and Economic planning ( 2010)  and Lands, Housing and Urban development provides guidelines for housing and related infrastructure development.
  • The Condominium Act 2001 which allows ownership and acquisition of secure tenure for individual units, promoting optimal use of land, and accesses to decent and affordable housing.
  • The Public Health Act 1964– The Building Rules Cap 269 lays down procedures and standards for construction. (Note that this Act will be replaced by the Building Control Bill 2009 yet to be ratified by Parliament).

Some ventures for investment in the ugandan housing sector;

  1. Slum redevelopment programme:-
  2. An estimated 60% of the population in urban areas in Uganda live in slums or informal settlements. These slums are located on land belonging to individuals without sufficient resources to develop it as housing development is capital intensive. There is need for partnering with potential developers with the capacity to provide the necessary financing to address this. The Government and land owners are now willing to partner with potential developers to turn some of these slums into modern, planned housing estates for all income groups, with commercial, recreational areas and light industry. The proposed partnerships will be based on the following:-
  3. Land owners opting for outright sale of their land,
  4. Land owners opting to lease land for 49 years or so,
  5. Land owners forming partnerships with private developers. Here land is valued in monetary terms, the land owner negotaites how much he/she wants out of the project and then gets the dividends.
  6. Land owner releases parts of the land say two-thirds  to the developer and they share dividends, with the rest developed by the land owner for his/her own benefit.
  7. The Land owner may lease land to the investor who develops it, operates it to recover the investment and hands it back to the land owner using the concept of Build Own and Transfer, Build Transfer and Operate or Build Own and Operate on agreed terms.

Public servants housing development scheme:-
Due to the increase in the public workforce and an increase in administrative units in form of new districts, there is a high demand for housing for public servants.

Furthermore, the houses which once belonged to public servants (in the ‘traditional’ 22 Districts) were sold off to sitting tenants under the Institutional and Pool Houses Divestiture policy.

It is worth noting that the creation of about 90 new Districts, brings a demand for decent housing by the workers who are posted in these Districts.

To address this, the Government has identified some public land to provide houses for teachers, health workers and other civil servants. Some of the redevelopment projects Government has earmarked include;

  • The Doctor’s village in Mulago-Kampala District into a well planned institutional housing estate with commercial and recreation areas to accommodate up to 4,000 health workers.
  •  Government houses along School Road-Old Kampala into modern and well-planned institutional housing estate for about  1,000 teachers.
  • Development of a housing estate on private land still being negotiated for sale to Civil Servants through the Housing Revolving Fund.

Housing and related infrastructure services:-

  • There is inadequate infrastructure services like roads, safe water, sanitation, solid waste disposal and electricity in settlements in the country.
  • This is aggravated by the high rate of urbanization which has out-paced the ability of the Local Authorities to provide social services due to the high costs involved. This calls for support from potential development partners.

Development of  a satellite city around Karuma Falls

The Karuma Power Station is expected to be operational within the next 5-7 years,. And, Government intends to develop a satellite city at Karuma on about 3,000 acres piece of land. The city will comprise of a well planned city with modern housing, hotels, shopping centres, industrial parks, office space, factories, gas stations, police stations, fire stations, hospitals and other essential amenities.

Conclusion
Developing the housing sector in Uganda relies on developing partnerships with all stakeholders. The Government of Uganda has provided an enabling environment for all stakeholders to participate effectively in housing delivery.  The Government of Uganda is therefore calling upon all development partners to seize this opportunity by forging partnerships with the Ministry of Lands, Housing and Urban Development in housing construction through Public Private Partnerships.

For any further information, contact; Permanent Secretary
Ministry of Lands, Housing and Urban Development
Plot 13/15 Century Building,
Parliamentary Avenue,
P.O. Box 7096 Kampala, Uganda.
Email mlhud@mlhud.go.ug
Tel:0414 230879 or 0414 259778

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