Uganda needs investment for all – not just the rich

Workers from the Kiseka Market in old Kampala relax after a tiring shift.

Uganda is a country on the move. Following the trauma of the Idi Amin period, political stability and economic policies aligned with international trade have generated economic development and social change – but are plans for attracting inward investment ignoring the economic realities facing Uganda’s people?

The government of Uganda has a number of ambitious ten and five year plans to achieve prosperity by 2040 and lower-middle income status as soon as 2017 – even though this means doubling average national incomes within two years.

As part of these enterprising plans, government has been attracting inward investment as well as promoting local enterprise. However, as with so many countries, good intentions can easily unravel unless based on economic realities.

This entails acquiring a detailed awareness of the interests of investors and how government can capture a reasonable proportion of the surplus generated to both recover the costs of public investment and to finance much needed improvements in the provision of housing, education and health services for those in need.

It cannot be assumed that merely by providing sites, industrialists will want to build factories, employ local people and boost economic growth. Many investors seek tax and other concessions, as well as long term tenure security and the subsidised provision of good transport and services, all of which require the expenditure of large sums of public money on a speculative basis.

As in so many countries in Africa, and even Europe, the government of Uganda lacks adequate expertise in assessing the nature and extent of demand for inward investment. Government agencies appear to assume that merely by providing serviced sites, investors will arrive and plans will be realised. However, as the example of the Kampala Industrial and Business Park at Namanve, on the edge of Kampala has shown, such projects are likely to fail unless based on sound assessments of the potential demand and relevant costs and benefits.

The view of Kampala from the Sanyu Babies Home in the city’s SW corner.

A second concern that constrains the ability to realise government plans relates to housing. At present, Uganda is preparing housing standards that are appropriate to a middle income country on the assumption that the country will shortly have achieved this status. Current draft standards include a provision for the minimum size of residential land parcels of 150m2, even though a large proportion of the increasing urban population live on plots less than half this size. Such official standards would therefore make it officially impossible for such housing to be legalised.

Increasing land costs also make it impossible for many low and even middle income households to afford new housing that meets such standards. Evidence from international experience presented at a workshop in Kampala on housing standards in early 2015 demonstrated that there is no direct correlation between housing standards and the economic status of a country.

In fact, an example was presented of a house measuring a meagre 1.5 metres wide on sale in London, the capital of a rich country, and in Japan, even many middle-income households would be unable to afford the housing standards being considered in Uganda. Despite all this evidence, the Uganda National Planning Authority continues to insist on standards it considers appropriate to a middle income country.

The result of such inappropriate housing standards and regulations? Many people in Uganda’s expanding cities will be forced to live in the very unauthorised forms of housing that the government is seeking to prevent.

Uganda has many assets, the greatest of which are its people. They have demonstrated enormous enterprise and resilience over recent decades and progress is being made in social and economic development. What is needed now is for government to be more pragmatic and sensitive to the needs of ordinary people and avoid imposing over-ambitious projects and standards. A more inclusive approach is likely to yield greater results, even if they take a little longer to be realised.

Geoffrey Payne is a housing and urban development consultant focusing on developing countries. He has worked in Africa, Asia, Latin America and the Middle East. Download Uganda’s national housing profile here.

Pictures via Rory Mizen & Dylan Walters / cc

, , , ,