Uganda requires an investment of at least 1,000 trillion Shillings to address a national housing deficit currently estimated at 1.8 million units, according to the National Housing and Construction Company (NHCC).
Established by an Act of Parliament (Cap 321) in 1964, the NHCC is tasked with increasing housing stock, rehabilitating the housing industry, and promoting homeownership among Ugandans in an organized environment. CEO Eng. Kenneth Kaijuka detailed the housing deficit by category, revealing that Uganda needs 5 million permanent houses with a lifespan of over 50 years, which would require an estimated investment of USD 150 billion (approximately UGX 555 trillion).
For semi-permanent housing units, which are expected to last more than 25 years, there is a deficit of 3 million units, necessitating an investment of USD 75 billion (around UGX 277.5 trillion). Additionally, the country faces a deficit of 2 million temporary residential units with lifespans exceeding 10 years, requiring USD 20 billion (about UGX 74 trillion).
Eng. Kaijuka noted that Kampala Capital City alone has a housing deficit of 300,000 units, requiring an investment of UGX 33.4 trillion to address this shortfall. In other cities, municipalities, and urban centers, there is an additional deficit of 500,000 units, which will require USD 15 billion (approximately UGX 55.5 trillion). Slum redevelopment efforts also face a similar investment challenge for 500,000 units.
“While commercial banks are often reluctant to fund projects outside urban centers, potential developers and investors should seize the available opportunities to help meet the country’s residential housing demands, excluding commercial, industrial, and institutional deficits”, Eng. Kaijuka elaborate.
Abubaker Kiberu, Senior Manager of Operations at Bank of Africa, emphasized the capital-intensive nature of the construction industry, encouraging investors to apply for loans to expand their operations. “Interested developers can benefit from various financial products, including short- and long-term concessional loans, grants, guarantees, and syndicate loans with competitive interest rates,” Kiberu explained.
Currently, Uganda grapples with a severe housing deficit, with only 2 million permanent housing units available against an estimated demand of 9.2 million. The country requires 300,000 new housing units annually, but developers are producing only 100,000 units. Experts suggest that to meet demand, the construction rate should ideally be 500,000 units per year.
According to census data from the Uganda Bureau of Statistics (UBOS) as of June 2024, Uganda has a growing population of 45.935 million, with an annual growth rate of 3.4%. There are 5.7 million active parents aged 35-49 years, a key demographic in the housing demand and supply chain.
Speaking at a recent Construction Symposium organized by the Uganda Society of Architects (USA) at the Imperial Hotel in Kampala on September 20, 2024, Gen. Katumba Wamala called on financial institutions to support sector players with credit facilities.
“The emphasis on project financing, compliance, sustainability, and innovative construction technologies is vital for our built environment and a key driver for the growth and advancement of our country’s infrastructure,” Gen. Katumba stated.
He emphasized, “As we secure our country’s future, our objective is clear: to create a robust construction sector that promotes economic growth, meets high-quality and compliance requirements, embraces sustainability, and utilizes cutting-edge technologies.”
“I urge and encourage each of you to contribute to this goal through your creativity, commitment, and teamwork. Together, we can enhance our nation’s infrastructure, accelerate development, and create a better and safer future for all Ugandans,” he concluded.
The construction industry contributes over 12% of Uganda’s gross domestic product (GDP) and has experienced steady growth over the past 20 years. Despite recent inflationary pressures, the sector remains on a path of growth and development (Uganda National Commission for UNESCO, 2013)
