Construction
and Building Industry
1 CONTENT............................................................................................................................................................... 2
2 THE BUILDING AND CONSTRUCTION
INDUSTRY.................................................................................... 3
2.1 OVERVIEW OF THE BUILDING AND CONSTRUCTION INDUSTRY................................................. 3
2.2 DEVELOPMENTS IN THE INDUSTRY....................................................................................................... 3
2.3 CONSTRUCTION INDUSTRY PERFORMANCE...................................................................................... 4
2.4 PRODUCTION OF BUILDING MATERIALS............................................................................................ 5
2.5 IMPORTS OF BUILDING AND CONSTRUCTION MATERIALS......................................................... 6
2.6 TRANSPORT INFRASTRUCTURE............................................................................................................. 7
2.7 WOOD AND WOOD PRODUCTS.............................................................................................................. 7
3 INVESTMENT OPPORTUNITIES IN THE
INDUSTRY............................................................................... 11
3.1 EXPANDED PUBLIC AND PRIVATE SECTOR INVESTMENTS........................................................ 11
3.2 HOUSING INVESTMENTS......................................................................................................................... 11
3.3 INVESTMENT IN THE ROAD CONSTRUCTION SECTOR.................................................................. 12
3.4 Composite Engineering Materials for the Construction Industry.................... 14
4 UGANDA’S COMPETITIVE ADVANTAGE................................................................................................... 19
4.1 AVAILABILITY OF RAW MATERIALS................................................................................................. 19
5 REFERENCES AND SOURCES FOR FURTHER
INFORMATION........................................................... 21
6 ANNEXES.............................................................................................................................................................. 22
6.1 PROJECTS IN THE INDUSTRY................................................................................................................. 22
6.2 COST OF MAJOR BUILDING AND CONSTRUCTION MATERIALS IN UGANDA - 2001
(1 US $ º UG Shs. 1730) 23
6.3 INDICATIVE COSTS OF INVESTMENTS FOR VARIOUS BUILDING MATERIALS..................... 23
6.4 PLAYERS IN THE INDUSTRY................................................................................................................... 24
6.5 USEFUL CONTACTS.................................................................................................................................. 25
Liberalization of the economy of Uganda since 1990
has spurred development in a variety of sectors bringing with it an upswing in
the building and construction industry with a growth average of 5.7 per annum
for the last tens years.
The rehabilitation phase up to 1990 saw a number of
public and private residential, commercial and institutional premises
refurbished. Over the past decade, the size of Uganda’s economy has more than
doubled. It is estimated to have had an average growth of about 6.0 percent per
annum. Real GNP per capita growth has averaged about 2.2 percent since 1985 and
over 3.3 percent since 1990.
Uganda has witnessed considerable improvement in its
overall investment rates. Gross domestic investment has averaged 14.3% since
1988 and 15.3% since 1990; testimony to the success of policy reforms
implemented.
A Ten Year Road Sector Development Programme
(1996-2006) has been developed and provides for an efficient, safe and
sustainable road network in support of market integration and poverty
eradication and development of the domestic construction industry. Investment
requirements are US $ 1.5 billion over the 10-year programme.
The National Housing Policy and Shelter Strategy lay
out the necessary framework for orderly and integrated development of the
housing sector. Interestingly though, the low income cadres remain uncatered
for, as most of the estates constructed with them in mind, have been taken over
by the middle income earners or leased to private companies. The housing stock
and especially low cost houses fall short of the housing demand, which has led
to increased demand for buildings and construction materials in the Uganda
economy.
The elimination of poverty and improvement of living
standards for the people of Uganda remains an essential cornerstone of
government policy. In principle the government is committed to supporting the
private sector to become powerful by creating an enabling environment that can
focus:
· In profits for the investor;
· New Job creation;
· A free and fair competitive environment;
· Attracts private investment;
and
· Create a strong export base.
It is envisaged that, the current reform program,
once completed should increase participation of both local and foreign
investors in the building and construction sector. It is hence government’s aim
and desire to attract private capital.
The construction industry has continued to grow at
an average rate of 8.8% per annum since 1995/96, well above the overall GDP
annual growth rate for Uganda (see Table 1). This has been attributed to
Uganda’s rehabilitation efforts as well as new investments in structures and
buildings. As the economy of the country continues to grow, there will be
increased opportunities for investment in the sector.
Table 1 GDP Construction growth at Factor Cost at constant 1991 Percentage Contribution 1995/96-1990/00
|
1995/96 |
1996/97 |
1997/98 |
1998/99 |
1999/00 |
|
13.4% |
7.2% |
7.6% |
7.2% |
8.5% |
Source: Background to the budget 1999/2000
The national requirements for building materials are based on shelter models, which estimate residential houses for the private sector over the period 1992-2006 (Table 2). It should however be noted that demand for building and construction materials would be much higher taking into account public institutions as well as private commercial and industrial buildings.
Table 2 National requirements for Building materials (1992-2006) p.a for entire period
|
Commodity |
Unit |
Requirement |
|
Bricks |
(‘000) |
9,711 |
|
Cement Bags |
(50 kg) |
30,655 |
|
Roofing |
(m2) |
143,438 |
|
Timber |
(m3) |
2,459 |
|
Others |
(USh. ‘000) |
15,267,256 |
Source: Government of Uganda, Department of Housing, Ministry of Lands, Housing and Urban Development, A National Shelter Strategy Vol. II, July 1992, Kampala.
Table 3:
National Requirements for Housing units (1992 - 2006)
|
|
Kampala |
Other Urban Areas |
Rural Areas |
All Uganda |
|
Total Population |
730,189 |
1,103,000 |
14,700,000 |
16,533,000 |
|
Average Population Growth Rate |
4.9 |
3.6 |
2.5 |
2.5 |
|
Average Household (HH) Size |
4.0 |
4.6 |
5.6 |
5.5 |
|
Number HH |
82,547 |
239,783 |
2,625,250 |
3,047,472 |
|
Persons per House Unit |
5.28 |
6.25 |
6.16 |
6.15 |
|
Dwelling Units |
38,293 |
176,480 |
2,386,364 |
2,688,293 |
|
Dwelling Unit Backlog |
4,254 |
63,303 |
238,886 |
359,179 |
|
Projected Population 2000 |
1,607,000 |
1,981,000 |
21,083,000 |
24,671,000 |
|
Total Housing Need |
263,457 |
254,176 |
1,378,457 |
1,797,343 |
Source: 1991 Population and Housing Census.
The production of building materials is an important
element of the construction sector. The production by local industries as shown
in Table 3 reflects that most factories still produce below 50% of their
installed capacities.
Table 3 Production of selected establishments (1995 – 1999)
|
|
|
|
|
Capacity |
Utilization |
|
|
|
Commodity |
Unit |
Installed Capacity |
1995 |
1996 |
1997 |
1998 |
1999 |
|
Paints |
‘000 lts |
4,311 p.a |
2008 |
1,932 |
2355 |
2446 |
2,450 |
|
Cement |
mt. |
600,000 p.a |
88,767 |
175,046 |
289,560 |
321,329 |
347,274 |
|
Clay bricks, tiles, etc. |
mt. |
50,000 p.a |
15,817 |
21,246 |
17,427 |
32,054 |
32,504 |
|
Cement bricks, tiles, etc. |
mt. |
15,000 p.a |
10,293 |
10,251 |
6,086 |
4,783 |
6,991 |
|
Corrugated iron sheets |
mt. |
n.a |
31,782 |
29,883 |
29,710 |
28,418 |
39,414 |
|
Steel doors and windows |
mt. |
480 |
150 |
203 |
143 |
134 |
124 |
Source: The Republic of Uganda Statistical Abstract, 2000.
Enterprises in the sector are still heavily
dependent on imported machinery, spare parts and imported raw materials in the
“manufacturing” process. Constraints limiting their full capacity utilization
include poor management, low levels of working capital and obsolete plants and
machinery.
In spite of the above, the construction industry
recorded significant growth in demand for clay products, sand, gravel and
aggregate, which although not quantified are still available in most parts of
the country.
Currently, imported construction items include
cement, lime, floor and wall tiles, sanitary ware, plumbing pipes and
associated fixtures, glass, ironmongery including hinges, door lock handles and
pulls, steel reinforcement structures, electrical items, including water
heaters, light fittings, switch control units, metal socket boxes, etc. Other
small items such as nuts, bolts, screws, rivets and washers are also imported.
In the short term, a wide range of opportunities for
importation of a number of building and construction materials exists. Many of
these products can, in the medium-to long-term, be manufactured locally to
create self-sufficiency in supply and lead to exports especially to the East
African Cooperation areas, the Great Lakes Region and the COMESA market. Table
4 below illustrates the position of imports into Uganda of major building and
related materials.
Table 4 Imports into Uganda of major
building and related materials
|
Import in
metric tons |
1995 |
1996 |
1997 |
1998 |
1999 |
|
Prefabricated buildings, sanitary ware, plumbing,
fixtures, etc. |
4,051 |
4,054 |
4,171 |
5,231 |
6,091 |
|
Cement |