Uganda has adopted 30 incentives for the housing industry to boost the pace of building homes, as well as boost tax revenue from the sector.

Notable among the incentives is tax remission for developers building a minimum of 20 units targeting low-income earners in a single project.

The incentives, largely borrowed from Kenya, are designed to encourage development of infrastructure, mobilising housing finance from various avenues including capital markets and citizens working abroad, and upgrading housing conditions in slums.

The cabinet approved the incentives to deal with a critical housing shortage. Past incentives including tax reductions have had little impact.

Delegates at a recent International Housing Association conference held in Uganda also proposed alternative sources of housing finance to address challenges in accessing finance and management models, aimed at reducing risk to allow lower prices for homes.

Uganda’s financial sector has some of the highest rates in Africa and stakeholders are currently debating a mortgage law needed to realise the government’s pledge to provide affordable housing.

The housing backlog in East Africa has been worsened by high urbanisation rates which are continuing to breed slums on the outskirts of major towns and cities. 

The UN Human Settlement programme says less than 10% of the population in most African cities and towns lives in formal sector housing. Experts have projected Africa will require 7,000 units of houses to be finished every day to clear the backlog and meet demand brought about by growth trends in population and urbanisation.