Realising Vision 2040: The Uganda Mandate

Vision 2040 is Uganda’s economic development roadmap from 2010 to 2040. It is ambitious and optimistic, and anticipates the country will reach middle income status by 2040. What does that really mean? Uganda is supposed to become much richer, on average, in 2040. At about $600 today, Uganda has among the lowest per capita gross domestic product (GDP) in the world. A middle income country is defined as having a per capita GDP exceeding $9,400. Stated differently, based on UN projections of population growth, Uganda’s GDP in 2040 has to exceed $780 billion. This would be a remarkable improvement over today’s $30 billion GDP but would still be half of Canada’s GDP today.

• Understanding Rapid GDP growth from $30 billion to $780 billion per year.

There are several ways to look at such economic growth. GDP has to increase 26 times in 24 years, or grow at 14% per year, every year, for 26 years. That is unprecedented even for China. Policy makers and government officials do not believe such growth is possible. Trouble is that the alternatives are almost unthinkable. If Uganda’s economy does not grow at this pace, it could become a breeding ground for delinquency and instability. In fact, sub-Saharan country populations are doubling every 25 to 30 years. If they do not match population growth with rapid economic growth, Africa will be ungovernable. Economic migrants seeking refuge in Europe will make the Syrian refugee crisis seem trivial.  Even North America could be overwhelmed with millions of African refugees arriving on boats. Rapid economic growth isn’t just nice to have; it is essential for Africa’s survival. But how can historically poor countries whose recent history suggests weak economic management grow at rates that even China could only dream of? A focus on housing and urban development can do it.

Building 13 cities

Vision 2040 talks about the need to develop 4 regional cities and 9 secondary cities by 2040. The distinction is pointless. Uganda needs 13 cities by 2040. The UN projects that Uganda’s population will increase by 43 million to reach 83 million in 2040. Accommodating 3 million people per city would take care of 39 million. In other words, Uganda has to build 13 cities each accommodating more people than Toronto in 2016. It is daunting but also exciting. The houses alone in each city will cost $25 billion or more. Infrastructure and other amenities will easily add another 15 billion for a total of $40 billion per city. For 13 cities that is more than $500 trillion. That translates into millions of jobs, thousands of businesses and a phenomenal amount of investment opportunity for foreign funds. It’s great for Uganda, the region, and foreign investment targeted at Africa but only if it is done.

Urbanization

Uganda at present is only 13% urbanized. Vision 2040 calls for an urbanized country but does not offer a specific target. Given that Cameroon has already achieved 50% urbanization, if Uganda was to be 50% urbanized by 2040, 42 million people would live in urban areas while 41 would live in rural areas. In other words, there will be as many people in rural areas in 2040 as there are in the entire country today. That is disconcerting. After the hard work of building 13 cities Uganda will have to contend with a larger rural population in 2040. This means that the urbanization initiative cannot focus just on cities. We have to ask the question -- how and where will the rural population live? How will the whole country be fed, clothed, housed and moved around? How will we meet the energy and water requirements of such a rapidly increasing populations? These are all difficult questions that must be answered.

Implementation

It is important to understand the problem but even more important to devise a solution. WaRP is focused on implementation. 13 cities have to built in 24 years. That’s an average of a complete city every two years. In practice it will be impossible to build and populate a city from scratch in 2 years. To achieve the target several, if not all, of the cities have to be started at once. 

Several factors have to be considered.

• Strategic Financing

For a City a Year, Uganda needs at least $20 billion a year in investment. Conventional approaches will not work. Sovereign guarantees are already tapped out. The country cannot collect $20 billion in tax revenue from $30 billion in GDP. Creative financing approaches have to be taken.

We know that over $70 trillion globally is sitting on the sidelines looking for positive returns. Africa has unlimited opportunities to offer positive returns. Why then aren’t the trillions in global money flowing into Africa? Africa’s investment opportunities have not been structured to the tastes of foreign investors.  

WARP is focused on organizing Africa’s urbanization opportunities to make them attractive to large institutional investors around the world.

• Strategic Partnerships

Housing and urban development capacity only exists where homes, towns and cities are being built. China has a lot of this capacity because it has been building entire cities from scratch over the past decade. Europe and North America have some capacity but they do not build nearly as many homes as China. Canada builds no more than 250,000 new homes each year. Africa has very little capacity but needs millions of homes a year. WaRP has to think about structuring partnerships that build the cities quickly while maximizing local input and respecting local conditions. This is easier said than done. Foreign professionals and contractors, especially those that do not speak English, may prefer to come in and work on their own unimpeded. Doing so would violate an essential component of the 13 city initiative -- the creation and development of local capacity. 

The 13 city initiative has to create millions of local jobs, thousands of businesses, and unlimited opportunity for Ugandans while also serving the countries that invest in building the cities. It is a delicate balance.

• Developers

At the outset, WARP will be leading development work. In time, as developers increase their capacity to deliver communities and cities, WARP will partner with them to provide the stock of housing.

• Contractors

WARP wants to create local capacity. Granted, we have to bring in experienced contracted, most likely from developed countries that already have a strong track record in large scale urban development. However, we have to ensure that local construction capacity is built and expanded so that we can create local businesses and jobs. We anticipate having thousands of contractors in Uganda within a decade, all capable of acting as lead or sub contractors.

• Building Supplies

This is an area where WARP feels African countries can benefit most. For the 13 cities in Uganda, hundreds of billions of dollars in building supplies will be needed. A deliberate program to support local business will quickly create wealth for Ugandans.

• Land Development

Every African country has its own version of land management challenges. There isn’t a universal fix to all land management challenges. WARP expects to address Uganda’s land management issues as we work to develop the 13 cities. Land development capacity has to be improved to ensure that there is enough land in the country for the 13 cities as well as for the rural aspects that support life in the cities.

• Urban infrastructure Delivery

This is an area that will initially be dominated by foreign entities but should eventually be an area of strength for local companies. 

• Social Service Delivery

“Soft” skills are going to be critical in the 13 cities program. Building the average of a city every two years, filling it with 3 million people and ensuring it is a vibrant, attractive and livable city requires a phenomenal amount of “soft” skills. Doing it for 13 cities, in a single country, over a 24 year period is unprecedented in human history. WARP is going to engage many social sector partners in our work. There is a large role for the social and not-for-profit sector in Uganda’s urbanization program.