By Carol Natukunda
The African Development Bank (AfDB) has approved $20 million to support small and medium enterprises involved in real estate and construction in Africa.
The bank noted that the money would help addressing the critical shortage of building materials while creating jobs and income in the region.
The money will be channeled through the Nairobi-based Shelter Afrique, one of the largest companies in Africa devoted to financing the development of real estate and housing across the continent.
In a press statement released yesterday, the bank stressed that economic growth, exponential urbanisation and a growing middle class are hampering the provision of adequate housing in Africa.
According to AfDB, the construction industry is growing at 20 per cent per annum, but this cannot sufficiently address the rising demand for housing partly due to a wide financing gap for construction and building materials.
“The public and private sectors have so far been unable to deliver sufficient resources to meet this expanding working capital requirement. Where funding is available, pricing remains prohibitive,” the statement read.
There is an acute housing shortage in Uganda. Statistics from the lands, housing and urban development ministry indicate that Uganda has a shortage of over 1.6 million housing units, with Kampala district alone, having a deficit of over 100, 000 housing units. The situation is likely to worsen as the country's population in urban centers grows to over 5.6% annually in urban centers.
Recently, the government announced plans to construct 6000 houses for low income earners in seven districts.
The districts are, Wakiso (1500 units), Lira (1000), Arua (500), Mbarara (500), Jinja (1500), Kabale (500) and Soroti (500). Some houses are already being constructed in Tororo.
Sources said that the project estimated to cost $250m (about sh641b). Experts say if financing for construction was easily available, housing would be a major source of revenue for the country.
“Whether someone has money or not, they want a place to stay. Ugandans want nice things. As their life improves, they want a better place that is accessible to their workplaces, but these places are limited,” notes Ali-shah Jivraj, a local real estate dealer in Uganda.