October 2023 – Prime Time Communications

Affordable Housing in Urban Informal Settlements: A Catalyst for Economic Growth in Uganda

By Robert Otim A good home is a base from which one can be economically productive. Good housing improves health and productivity of the occupants who in turn have the ability to contribute to the economic growth of a country. However, about 1.8 billion people globally within urban centers are struggling to find decent and affordable housing. The lack of affordable housing is a major driver of informal settlements. These are areas characterized by a high population, small and congested housing units with limited access to water and sanitation facilities and very prone to diseases and epidemics. The demand for affordable housing especially in urban centers is one of Uganda’s biggest challenges due to its fast growing population. This is coupled with increasing urban poverty resulting into the lack of access to credit and financing options hence the inability to take on opportunities such as rental housing or mortgage-financed homes which fuels the growth of informal settlements. Land tenure issues also contribute to the proliferation of informal settlements. Many residents in informal settlements do not have secure land tenure rights, making them vulnerable to eviction and displacement. This uncertainty discourages investment in better housing, leading to the growth of informal settlements as people settle on unoccupied or disputed land. Addressing the high prevalence of informal settlements in Uganda requires a multi-faceted approach that includes affordable housing initiatives, improved urban planning, secure land tenure, poverty reduction strategies, inclusive economic development, government policies, community participation, and the collaboration of various stakeholders to tackle this complex issue. In 2008, the government of Uganda approved the National Slum Upgrading Strategy and Action Plan in an effort to slow down the growth of slums and eventually stop the creation of new ones through legal and land market reforms, revamping planning and zoning regulations. The policy is also meant to provide security of land tenure as well as building codes to make housing more affordable to the citizens of Uganda. The policy further provides for inclusiveness by bringing all housing sector stakeholders on board to pull resources together to support government in providing affordable housing for Ugandans. Organizations such as Habitat for Humanity Uganda, a housing organization dedicated to eliminating poverty housing in Uganda has on a number of occasions yielded to government’s call through collaborating with government entities, private sector partners, and communities to seek out innovative ways of providing affordable and decent housing for Ugandans. Early this year, the organization together with the Ministry of Lands, Housing and Urban Development (MLHUD) launched the Home Equals campaign, a five year advocacy campaign dedicated to achieving policy change, at all levels, to ensure that people living in informal settlements have equitable access to adequate housing. The Home Equals campaign seeks to advocate for increased collaboration with settlers of informal settlements, accessible quality services and improved land governance and leadership by local government land committees. This campaign together with other initiatives are steps to addressing the affordability challenge in the housing sector through providing a platform and foundation to access wider development opportunities that contribute to the well-being of humanity and the country as a whole. Investing in affordable housing initiatives in urban informal settlements creates employment opportunities for workforce which not only alleviates poverty but also stimulates economic growth by generating income for individuals and local businesses. During the World Habitat Day in October this year, the MLHUD and Habitat for Humanity Uganda will hold the second annual Uganda Housing Symposium under the theme: Affordable Housing in Urban Informal Settlements as a Driver of Economic Growth at the Mestil Hotel in Kampala. The symposium will seek for solutions so that affordable housing projects serve as a catalyst for micro-enterprise development within urban informal settlements. As new housing units are built, the demand for local goods and services increases. This presents an opportunity for small businesses to flourish, providing goods and services such as building materials, plumbing, electrical work, and home furnishing. By supporting these micro-enterprises, the local economy is strengthened, creating a ripple effect of economic growth. Access to affordable housing in urban informal settlements directly impacts the health and education outcomes of residents. Adequate housing provides a safe and healthy living environment, reducing the prevalence of diseases and improving overall well-being. Moreover, children living in stable housing are more likely to attend school regularly, leading to better educational outcomes. Investing in affordable housing not only improves living conditions but also contributes to the development of a healthier and more educated workforce, which is essential for economic growth. Affordable housing initiatives can serve as a catalyst for the development of infrastructure in urban informal settlements. As housing projects are implemented, there is a need for improved road networks, water and sanitation facilities, and electricity supply. These infrastructure improvements not only enhance the quality of life for residents but also attract future investments and economic activities in the area. The writer is the National Director, Habitat for Humanity Uganda. noffice@hfhuganda.org

October 23, 2023

Out to Lunch

#OutToLunch Declined treasury bond bids could spur private sector growth

#OutToLunch Declined treasury bond bids could spur private sector growth By Denis Jjuuko As you already know, Uganda is one of the most entrepreneurial countries in the world. Many people including those in formal employment have some bit of business they do on the side. We have come to know it as the side hustle. Many of these businesses aren’t that profitable as they are subsidized by their owners using income or perks from their formal jobs. A farm in the countryside that may look profitable may cease being so once the owner starts factoring in the cost of driving there every weekend. Others are subsidized by spouses, sometimes unknowingly. If for example you fuel your spouse’s car which they use to go to run their boutique in the mall and meet all its maintenance cost, they may not realize that the business they think is profitable isn’t actually. Once the formal job goes or the spouse renegades on meeting some costs, many of these side hustles collapse. But they aren’t the only ones. Even those started by full time hustlers collapse within the first five years. There are many reasons why businesses collapse but one of them is the cost of capital or in most cases the sheer lack of it. If you are into motivational books from America and Europe, they will claim that capital isn’t the most important thing for an entrepreneur. They may have a point but they write from an economy where venture capital exists or where loan interest rates are in single digits, not ours of upwards of 20%. So, for a Ugandan entrepreneur, capital or the lack of it is a key reason for the success or failure. So, I was intrigued reading a press release from the Bank of Uganda that gave results of the central bank’s treasury bond auction held on 12 July. They (central bank) needed to borrow Shs150 billion for a three-year period and Shs300 billion for 20 years. Instead, it received bids worth Shs272 billion for the three-year bond and Shs838 billion for the 20-year bond. It accepted Shs171 billion for the three-year bond at 13.5% interest annually and Shs354 billion for the 20-year bond at 15%. More than Shs585 billion was not taken so investors may be out there looking for opportunities on the secondary market or for the next auction. As individuals and institutional investors trip themselves to lend to government, businesses are collapsing for lack of money. And the government is telling them, we don’t even need much of your money anyway. Take it elsewhere. But they won’t because treasury bonds and bills give investors a very low risk return for their money. So imagine if you invested Shs1 billion for 20 years and did nothing and at the end of the day earned a gross income of Shs150 million annually (paid twice a year), why would you do anything else? A commercial bank would rather invest its billion in a treasury bond where it is almost guaranteed of a 15% gross return while doing nothing than lending it to a businessperson at 24% without any guarantees that the money will be paid back. The businessperson may have secured a loan with a building or land as a collateral but still commercial banks are not in the real estate business. They largely frown at the hustle of selling people’s assets when they fail to pay back. To avoid the inconvenience of selling people’s assets when they have failed to pay and the cost of loan recovery, they prefer to lend to the government through treasury bonds and bills. Without any hustle, they get their gross 15% annually on their investment. Who wouldn’t want to do that? That pushes the cost of money in Uganda higher because the alternative through the central bank auctions is much better than running after an individual to pay back. And sometimes you even end up in costly legal battles as the borrower claims you didn’t have the legal mandate to lend to him and therefore wouldn’t pay. But this Shs1 billion may not be able to grow the economy as much as that invested in the private sector where many jobs could be created. As a country we need to find solution for affordable capital for the private sector. So instead of the central bank declining nearly Shs600 billion of bids, what about taking it at a lower interest rate and then lend it to businesses at a rate that can enable businesses to grow? That way they would collect more taxes from the growing businesses. Or how do we build the confidence of investors in treasury bonds to instead invest in private sector when their bonds are declined? The writer is a communication and visibility consultant. djjuuko@gmail.com

October 18, 2023

Infrastructure

#OutToLunch Privatize road rescue services to reduce accidents on our highways

#OutToLunch Privatize road rescue services to reduce accidents on our highways By Denis Jjuuko If you ever pitch rides in vehicles that belong to international organizations operating in Uganda, you will notice at least two things. The first one is that many don’t move beyond 6.00pm especially on the highways. If the time is not enough to cover the distance and be parked by 6.00pm, they reschedule to the next day. The second one is that many drivers don’t usually do speeds beyond 100kph. Yet some of these vehicles are some of the most powerful on the road — V8 or V6 engines and brought in brand new. Not the usual end of life vehicle we gladly import from Japan. The reason they insist on their vehicles moving during day is largely for safety reasons. Regardless of how modern the car headlights get, there is better visibility during the day which enables the driver to make informed decisions fast. It is more likely to find a tired driver during the night than during daytime. The assumption is that the driver would have had enough rest during the night to drive carefully during the day. At night is when you find a crazy driver that has decided to do a return journey from Arua to Kampala on the same day. Driving under the influence of alcohol is more common during the night than during the day. Many people who drink alcohol don’t do so during the day. But in the evening, they grab a bottle or several after which they sit behind the steering and drive, sometimes very long distances. Also at night, there is no traffic police on the road to warn or fine drivers breaking traffic rules. It is one of the reasons vehicles especially trucks that are in dangerous mechanical conditions (DMC) or those that are wrongly loaded tend to move at night. Apart from a police patrol vehicle stopping them occasionally, they make their trips unrestricted. Many such trucks breakdown on the roads and don’t provide enough warning for other road users. Chances are higher to ram into a stationary vehicle at night than during the day. Do road accidents occur during the day? Absolutely. But it is way safer to travel during the day in Uganda than at night. Even if you put road accidents aside, it is still safer to travel during the day as you can easily get help should you have a mechanical issue to deal with. Thugs that stage illegal road blocks also do so during the night. Of course, government should not regulate the time when we can travel on the highways but we could learn a thing or two from international organizations and why they insist that their vehicles and staff should only move during daytime. They are trying to reduce the possibility of avoidable road accidents and other incidents that could put their staff in danger. Road accidents are always in the news either when many people die in a single road incident or when a prominent person dies in one just like businessman Apollo Nyegamehe popularly known as Aponye did two weeks ago. It is not clear what exactly caused the accident that claimed his life but what we know so far is that he was traveling at night and his vehicle rammed into a stationary truck. Although the government may not legislate the time we should be moving, it can make roads safer. The model being used on the Entebbe Expressway could be deployed on all the highways or at least on the busiest ones. This can be done by reinstituting road tolls. So every road user pays a fee and the money is used to maintain the road and most importantly clearing it of any obstacles that could lead to accidents as well as helping those involved in accidents. A private competent company would be hired to provide a road safety service. Once a vehicle gets a mechanical problem or runs out of fuel (like most vehicles in Uganda do), a tow truck would arrive in time to get it off the road to ensure that it doesn’t lead to traffic delays and most importantly accidents. An ambulance would also be deployed to rush those in need of medical attention to nearby health facilities. That would require several tow trucks and ambulances (including a helicopter ambulance) deployed every predetermined distance for them to be effective. Where the need may require heavy lifting cranes, the company managing the highway would be able to put measures in place for drivers to use the road carefully until the obstacle has been cleared. The company would also maintain road signage and such other furniture. This would not end all road accidents but at least it would reduce the carnage on our highways and make them safer than they are today. The writer is a communication and visibility consultant. djjuuko@gmail.com

October 18, 2023

Health

#OutToLunch: Should every newborn baby be subjected to a DNA test?

#OutToLunch: Should every newborn baby be subjected to a DNA test? By Denis Jjuuko In some African cultures, when a baby was born, the parents took it to its paternal grandparents to be given a clan name. It was never a big event even though the birth of a child has always been a cause for celebration in this part of the world. The grandfather of the newborn baby would summon his sisters to come to the naming event. It was the duty of the sisters, the baby’s paternal aunties or ssengas in Luganda to look for body marks that confirmed that the child belonged to their family or not. They checked the ears, the fingers, the toes, any birth marks that would give any clues. They would pass on the results to their brother, the grandfather of the child. If they doubted that the child belonged to their nephew, the grandfather would give the child a universal name that doesn’t necessarily belong to any clan. In some rare cases, grandfathers outrightly refused to give the child any names. But this usually caused havoc so many avoided it. In many families, “paternity doubted” children were known to exist. But divorce was rare so people carried on with their lives and kept what they thought were family secrets. The Baganda even coined a saying that you only knew your biological father after the death of your mother. As long as you mother lived, she could at any one time introduce you to another man as your biological father. And her word was final. Women many times introduced adult children to other men they had had casual or secret sexual relationships with as the biological fathers. In such cases, some children changed names and acquired those of the new clans where they now belonged. Advancements in technology led to DNA (Deoxyribonucleic Acid), cheekily written in full by many today as Ddala Nze Amuzaala to literally ask if you are the biological parent of the child. In Uganda, the stories started largely by some local TV stations providing this as a service where two men or more claimed to be the fathers of the child. Some of these stations created popular programs where a series of late night shows were done, interviewing the claimants and the mother. The TV stations ended up paying for the samples to be ferried to South Africa to establish the paternity of the child. In one famous example, DNA samples showed that a pair of twins belonged to two brothers. Eventually, technology got here and labs were established in Kampala that offer DNA tests at a fraction of what was being charged by the labs in Johannesburg. Today, many people who doubt the paternity of the children take samples so they could establish whether they are the biological parents or not. But it wasn’t just parents, also siblings in bitter quarrels of how to manage their late parents’ estates frequent these labs. This has led to increased stories of DNA tests and some people have argued that the results will lead to breakdown of families and a dysfunctional society as children are subjected to severe psychological effects. And in a country where psychosocial support is almost alien, one could understand the argument. But decreasing resources also dictate that most people wouldn’t want to take care of other people’s responsibilities. In the years gone by, children especially in rural areas contributed to their school fees by working on their parents’ coffee shambas or matooke gardens. Some elements of social welfare worked. But as Uganda continues to urbanize, it becomes increasingly difficult for many people to look after children. So the burden, the argument goes, should go to the biological parents or people should know which child belongs to them and decide to either look after them or not. Some women on social media platforms have argued that they have been looking after children that aren’t biologically theirs and therefore men shouldn’t complain today. The difference, however, is that women get to know that the children men bring to their homes sired outside marriage aren’t presented as their own. For the men it is different, the children are presented as biological children of the man until doubts either emerge or through some misunderstanding the facts start presenting themselves. DNA tests are then done to confirm or deny the allegations. So if we want to protect the psychological well-being of the children, shouldn’t it be better that every baby born is subjected to a DNA test before the mother is discharged from the maternity ward? This would also help in addressing cases where a baby could accidently be switched by health workers during birth. The writer is a communication and visibility consultant. djjuuko@gmail.com

October 18, 2023

Automotive Industry

Uganda to launch three-wheeler vehicle with irrigation and electricity generation capabilities

Farmers and rural households are set to benefit from a new three-wheeler motor vehicle on the market that enables them to transport their goods, pump water and generate electricity. President Yoweri Museveni is set to launch the trike during celebrations to mark Uganda’s 61st independence on 9 October in Kitgum District. The trike, named Bingwa, Swahili for champion, is a product of a group of self-trained innovators from the informal sectorled by Rogers Mubiru under their company Kevoton Motions Engineering Ltd. The engine casting was made at the John Lugendo Foundry in Kibuye in Kampala. Bingwa is powered by a 0.8 litre 2-stroke engine with a potentially higher power-to-weight ratio compared to traditional 4-stroke engines making it fuel efficient and easy to maneuver. This was revealed by Hon Dr Monica Musenero, the Minister for Science, Technology and Innovation (STI) in the Office of the President during a flag off ceremony held at the Kiira Motors Vehicle Plant in Jinja where the trike was built. Bingwa, the three-wheeler commonly known as Tuk-Tuk can transport 1,000kg of goods, pump 6,000 litres of water per hour for irrigation and generate 6kW of electricity every hour, thereby solving some of the farmers and rural households’ most immediate challenges. The STI Secretariat under the Office of the President provided a grant to Kevoton Motions through the National Research and Innovation Program (Innovation Fund) for the domestic manufacture of a 3-in-1 trike for mobility, water pumping and electricity generation. Kiira Motors incubated and supported Kevoton Motions to bring their idea to life. The Bingwa trike is relatively affordable for smallholder farmers while equipped with technologies that solve their most immediate challenges — transport, water, and electricity. In Uganda, 90% of the population lives in rural areas while 80% of the households are involved in agriculture according to the Uganda National Population and Housing Census of 2014. However, only 2.9% of the households use irrigation on at least one plot for the first season and 2.4% for the second season. Just 19% of households are estimated to have access to electricity for lighting on the backdrop of an electricity distribution access of 51%. A solution that addresses the household’s challenges is critical in fostering economic development. “Mobility is a fundamental component for rural development, connecting people to opportunities, services and resources necessary for their well-being and economic progress,” says Hon Dr Musenero. “Electricity plays a transformative role in rural agrarian communities by boosting agricultural productivity, improving living conditions, enhancing education and healthcare and enabling economic diversification,” Hon Dr Musenero adds. Dr Musenero committed her support to innovators. “We are behind schedule in terms of innovations and we must therefore work hard to catch up with other continents. My ministry will continue to provide the needed support to innovators to come up with such products,” she said. She further says that irrigation is crucial in ensuring consistent water supply for crops to improve yields and enhance food security. All these three functions (mobility, electricity and irrigation) are key components that the Bingwa trike can be able to execute. The Bingwa trike can lead to rural transformation if it is integrated into the Parish Development Model or other government programs. “We got the idea of developing this engine in 1998 because we didn’t have a product that we could call ours as a country at the time. After attending an exhibition, we started working with Makerere University because of our innovativeness and eventually Kiira Motors under the STI Secretariat that has led to the production of the Bingwa Trike,” says Rogers Mubiru, Founder and Director at Kevoton Motions Engineering Ltd. “We hope that this development will lead to an offtake of 600 units which can be deployed in different sub-counties across the country to enable households improve their livelihood,” Mubiru says. The flag off to Kitgum where Bingwa will be officially launched was also attended by Hon Denis Onekalit Amere, the Member of Parliament for Kitgum Municipality who pledged his support to sustainable products. “Bingwa will solve challenges of our people across the country who are predominantly farmers and live in rural areas,” he said. “This is a welcome innovation but we need to ensure that Mubiru and others innovators like him get the support they need so that our country industrializes thereby creating jobs for our people,” he added. Allan Muhumuza, Mobility Team Leader at the STI Secretariat says that the success of the project has enabled the government to validate an incubation model where a budding innovator, especially in the informal sector is placed under the mentorship of an anchor enterprise like Kiira Motors. “This enables us to transfer skills, utilize existing infrastructure, create institutional capacity and foster synergies towards industrialization,” he explains. Most of the parts used to make the Bingwa Trike are made locally and many can be made by independent suppliers in the automotive industry value chain thereby making the case for localization and value addition of products. The support from the STI, which commenced in August 2022 has led to the Bingwa trike being made with 55% local content, according to Albert Akovuku, the Director of Production at Kiira Motors. “The key parts which have been locally made are the engine, the chassis, the frame and the body panels,” Akovuku reveals. “Specifically, 70 out of 128 parts have been made locally. Mass production will be at the Kiira Vehicle Plant in Jinja with initial capacity of 1,000 units per a year growing to 4,000 per a year in the medium term,” he adds. Realizing the potential of the project, the Uganda Development Bank (UDB) has offered project preparation funding amounting to USD250,000 (approximately Shs900 million) to facilitate the development of the project business plan and production readiness. The Bingwa trike will cost Shs28 million, lower than what one would spend if they were to buy an ordinary tuk-tuk, water pump, and a power generator. The Bingwa Trike uses diesel. With an estimated total addressable market of 100,000 trikes in Uganda in

October 4, 2023