Uganda

Country Profile

With an estimated population growth rate of 3.58 percent (2010), Uganda’s total population—estimated at 33.40 million at the end of 2010—is projected to increase to 45 million by 2020. The population living in urban areas as of 2010 was only 15 percent. However, rural urban migration, combined with the high population growth rate, causes the rate of urban growth to be very high at an estimated 4.8 percent in 2010. This puts enormous stress on the urban housing and infrastructure sectors.

A recently released housing survey by the Uganda Bureau of Statistics points to an improvement in housing conditions in the country, related to the steady per capita economic growth. However, the high urban growth rates and high current urban housing deficit, high employment informality and very limited access to housing finance create an enormous challenge to address the housing problems for urban and state authorities. Uganda has a housing deficit of approximately 1.7 million habitable housing units. It is reported that Kampala alone has a housing deficit of 550,000 units. It is further estimated that two decades from now Uganda will have a housing shortage of nearly 8 million units, of which 2.5 million will be in urban centers and one million in Kampala.

The formal housing and mortgage sectors are still in their infancy but growing quickly with the emergence of private real estate developers such as Akright Projects, Jomayi Estates Ltd, HL Investments Ltd, Tirupati Ltd, Pearl Estates, Hosanna Ltd, Kamugasha Agencies, among others. These firms have benefited from an expansion of mortgage lending by commercial banks and have in turn partnered with commercial banks such as Stanbic Bank, Housing Finance Bank, and Barclays Bank to offer mortgages to Ugandans who cannot afford outright purchases. In partnership with the private sector, the Ugandan government has promised to pay for the development of public goods in planned estates, like water, sewerage, electricity and roads. These combined initiatives have created a boom in the housing sector.

Even so, the mortgage sector is small and is less than 1 percent of GDP. Uganda enacted a Mortgage Law in 2009 that will facilitate the expansion of the mortgage sector. The main constraint in the mortgage sector is the lack of more permanent access to long-term funds, which are now made available on an ad hoc basis by international development banks such as the European Investment Bank.

The main bottleneck to Uganda’s housing and mortgage sector is, however, the absence of proper legislation of the real sector. Uganda lacks a housing and urbanization policy to regulate and accelerate the construction of housing units.