Government to support home financing
KAMPALA, Uganda - The Minister for Lands, Housing and Urban Development in Uganda, Betty Amongi has promised to compel government to interrogate the country’s financing regime to allow public commercial entities like National Housing and Construction access cheap finance to enable them provide low cost houses for nationals.
“I must commend the work you are doing because amidst the challenges, you are the only government commercial entity that delivers. The aspect of credibility makes you outshine some of the private sector players, because you have done well in providing quality, planning, security and in providing genuine titles. However, the houses are still costly.” Amongi said, in a meeting with officials and staff from National Housing and Construction.
Amongi said there’s need for government to support public entities that perform to take up the development of public infrastructure instead of relying on investors. “We shall push for you. You need to strategically position and market yourselves as a capable entity and you will be prioritized in undertaking public works,” Amongi said.
She said government has in the pipeline, several projects that the housing agency can benefit from. Amongi said government has planned to establish 22 industrial parks in its new term of government, but plans to start with the construction of five industrial parks soon.
She said, government has also worked out a project to construct institutional houses for the army, police, teachers and health workers, Amongi advised National Housing to position and anchor itself as a vehicle that can deliver those projects.
“You need to establish linkages with various stakeholders going forward, because we must work out a way to provide decent housing for our population and the above projects will help you benefit from direct government support,” she said.
On the other hand, State Minister for Housing and Construction, Chris Baryomunsi reiterated government’s plans to make Uganda a middle income state by 2020. He said if government’s plan for a middle income state is to be achieved, the issues of qualitative change will be top on the agenda and housing comes in handy in improving people’s livelihoods.
“Previous studies have showed that there’s still a big challenge of house deficits in Uganda. Similar studies also show that the rate of urbanization in Uganda is enormous and many Uganda will be living in urban areas in the few years to come, this being the case, we must work together to provide affordable housing for Ugandans,” Baryomunsi said.
He said to help National Housing address the issue of deficits and demand for affordable house, there is need to strengthen issues pertaining to policy and administration. He said this can be achieved by developing policies that strengthening physical planning across the country because at times, National Housing finds itself planning a head of other government institutions especially those charged with the responsibility of physical planning. He revealed that government has planned to train all Sub County Chiefs in physical planning such that they can superintend the planning process of urban centers in rural areas.
The Chief Executive Officer National Housing and Construction, Parity Twinomujuni said the housing state in Uganda is wanting. He said issues of affordability have been a problem because of high cost of financing.
Twinomujuni said they borrow from financial institutions at 20% and the buyers also borrow at the same rate for a period of 20 years. This therefore erodes profitability and demand respectively.
He said the cost of developing infrastructure is a push factor to the overall cost of houses. “The costs developing utilities is extremely high, for example, the cost of doing roads is at 18%, this therefore raises the cost of what would be sold at Ushs100million to Ushs200milliion,” Twinomujuni said.
He said if other government entities like UNRA, national water and sewerage cooperation came in to provide such utilities, it would help leverage the cost. Twinomujuni asked government to work out a way that will enable them obtain cheap finance to address the issue of affordability.