Chasing the Ugandan Dream
To others, Uganda’s future is bleak but in your blogger’s world, its full of promise. Booming economies, rising middle class and higher per capita income are helping fuel a spending binge that is creating new wealth and giving rise to the Ugandan dream.To say that Uganda’s property sector is hot would be an understatement.For the likes of Miriam Nalwoga, a Kampala-based spare parts trader turned real estate developer, it is her highway to fame and fortune. Sharply rising property prices over the past few years have created a new breed of multi-millionaires in Uganda as those with large land holdings or ability to build large-scale developments have benefited.Over the past two years, Miriam has invested heavily in the property market, starting off with small stakes in Nateete and Bunamwaya in Kampala, she is now developing a major mixed-use project in Makindye. Today, her property projects are estimated to be worth around $6 million.That’s an incredible achievement for a 36 years old female in a country where male domination in all sectors of economies is well documented.According to an adviser at a Kampala based property consultancy firm, property prices have risen by 80 percent over the past five years and look poised for further gains. “If everything goes well with the next election slated for February 2016, Uganda property market will take another bounce up,” he told your blogger.The number of projects in the pipeline is tremendous as every major developer wants to get in now.Uganda tycoons have also done well as the property sector, outperforming the market by 42 percent.Many of them are using this golden opportunity and strong investor interest to raise more funds for expansion.What is behind this unprecedented property boom in Uganda and is it a combination of an all-time low fixed mortgage rate, growing GDP per capita and a rapidly growing middle class and everybody is buying property as an inflation hedge as there is a lot of liquidity on the ground.However, others disagree and claims the market is flat after an oversupply and rising cost of living.
A property agent in leafy Lubowa area, located less than ten kilometers outside Kampala told me that the property boom will continue for the next three to six years with all segments likely to experience strong growth.Record levels of foreign direct investments have, for example, fueled strong demand for industrial property.This is good news for Uganda property tycoons such as Sudhir Ruparelia of Ruparelia Group as they saw their net worth rise significantly in last year Forbes Rich list.With one of the largest land banks in the Uganda, Sudhir Ruparelia’s net worth rose well over $1 billion. Ronald Mutebi may not be a household name in Uganda, having lost all his investments during the political crisis of late 1970s – 1986, but the 73 year old move into the property sector has paid handsome dividends.He has been acquiring land over the past decade and now has one of the largest property land banks in the Greater Wakiso region. As a result, he saw all his land net worth rise by $107.6 million to $208.1million this year.A robust economy growing at above 6 percent per annum has also created wealth across diverse sectors from banking to manufacturing, investments and consumer products. Ugandans, armed with greater spending power, have gone on a buying binge, snapping up just about anything they can lay their hands on.And this buying spree is likely to continue for the next 25 years. The country’s middle class is expected to grow by 25 million consumers by 2040, according to an American research company. For consumer companies that will mean an additional $50 billion in annual spending by increasingly sophisticated consumers.Any Ugandan entrepreneur that sells goods and services to the middle class and has good brand recognition is going to do well according the research company’s report.From consumer gadgets to cars to cement, anyone who bets on the rising middle class and domestic spending stands to gain in Uganda significantly.With a growing consumer base,Uganda is now viewed as both a manufacturing base as well as one of the fastest growing markets in Sub Saharan Africa. Both foreign investors as well as domestic players are busy setting up manufacturing plants and even industries such as textile and tobacco are booming.