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Construction Boom Drives Growth for Uganda Steel Industry

Construction in Uganda. Image Source: constructionreview

UGANDA, Kampala | Real Muloodi News | The construction industry is experiencing rapid growth in Uganda, thanks to the growth of the nation’s population, rising personal incomes, demand for real estate, and the government’s infrastructure development programmes.

This growth has helped local steel manufacturers expand their operations. A prime example is Roofings Limited, the nation’s largest steel products manufacturer, which has expanded its operations beyond Uganda’s borders. Roofings Limited exports Ugandan steel across the East African region, the Democratic Republic of Congo, and South Sudan.

The company is currently building a plant in Mombasa, Kenya, to supplement the ones in Uganda. 

Meanwhile, the government has plans to develop the steel industry further down the value chain. As it is, Uganda imports 75% of materials for steel production. 

Abraham Muwanguzi, a science and technology manager with Uganda’s National Planning Authority, said “Currently we import about US$362 m worth of steel products, and 70% of those are semi-finished products like coils and billets.”

The government aims to develop iron ore smelting and reduce this reliance on imports.

Last year construction accounted for 5.5% of Uganda’s GDP. Growth in infrastructure developments, hydroelectricity, and oil mining projects in the Lake Albert area were the catalyst for this rapid growth. 

An international audit firm Grant Thornton Uganda found in their 2019 report on Uganda that “Forecasts from 2019 to 2028 state that construction growth is expected to peak in 2022 by 10.1% because of the completion of the Hoima-Tanga export pipeline.” 

The report added, “Expected revenues from oil exploration and processing (will) provide the government with increased room for spending on infrastructure projects.”

Rising personal incomes among Ugandans also contribute to the growth of the building and real estate industries because Ugandans invest in building homes or improving their own. 

During last year’s election campaigns, President Yoweri Museveni referenced the increase in iron sheet roofs in Northern Uganda, saying it was a sign that “Things were moving along.”

In 2017, 75% of Ugandan homes had iron roofs, a rise from 57% in 2000.

However, the global COVID-19 pandemic stymied projected growth in real estate.

“The immediate impact has been a severe drop in real estate transactions,” wrote Rogers Matovu, a Makerere University lecturer of real estate and financial management.

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