Blog Post

 It is interesting how tough times make the alert thrive! Take the example of the Covid-19 lockdown! Some sharp traders did not return to town (Kampala city) when the country re-opened – they started business in the suburbs and beyond where the population had retreated to, moreover in their own premises. But let us face it: our economy constantly subjects us to stress. Have you noticed how fuel prices are creeping back to extortionist levels again, for example? So, if when the going gets tough the tough get going, then all the time is time for individual development in Uganda. Today let us address our unfortunate brothers and sisters who ‘serve’ us so that we can concentrate on our professions. I am talking about the office help, the house help, the driver and the gardener. These people too deserve to own a house of their own but some of them think their earnings are too little to allow them entertain the idea of becoming a ‘landlord’. As a Rotarian, with the welfare of others being your concern, you can help show these people the concept of strength in numbers and how it can liberate them from perpetual ‘bupangisa’. Before letting that office help export herself to the Middle East as a housemaid, or becoming a fulltime housewife to a boda boda boy, why not encourage her to join four other people in her income bracket and they form an investment group! They don’t even have to register it – they just need to open a joint bank account and commit to saving a certain amount of money each per month. The first and possibly only hurdle is to get some five positive thinking people together, from the crowd of negativist pessimists who declare every suggestion impossible even before hearing you through. One you have the attention of our less fortunate brothers and sisters, take them through the time tested approach, which has been handed down to us over generations and is repeated in all cultures of the world. The English summarized it in a saying, “One by one makes a bundle,” and there certainly is an equivalent in whatever your own language is. In all countries of the world, one of the most solid investments (literally solid) you can make is in owning a house. Even if you don’t live in it in case it is located far from your work station, someone will rent it and pay you. Some countries have well developed property and mortgage markets, ours is not yet mature. But the good news is that there are now increasingly reliable ways to acquire your own house. Tell our brothers and sisters that not all the home owners they see are rich; what they have in common is determination. And institutional structures to make home ownership are rising to the occasion. Although forming/ joining a housing cooperative society can present one of the cheapest ways to acquire/own a house, it requires bringing together at least 30 like-minded persons, by law. 

But there is good news around, for as we said, there are more than one ways to skin a cat. So you have brought together some five young and not so young positive-minded Ugandans, who earn in the region of 400k to 600k. Let’s us build the scenario basing on five serious persons, not negative ones who prefer to whine and blame anyone and anything else for their hardships, and giving excuses for not being able to save and invest. The scenario is practical and realistic. The second step is for the five to open their investment account in the bank, for example dfcu, where they will be given enough instruction on how to manage it. Another realistic banks I know that can listen and advise are PostBank and Centenary. In fact for Centenary, all the decisions of the magnitude for this model are made at branch level. Call it a kalango but it is useful information which our youth are entitled to. And guess what, dfcu and even Standard Chartered that appears to be aloof can pay 11% annual interest on savings that are not interrupted. So if you agree to each contribute 150k per month, you will have about ugx10million after one year of saving. Today, in 2023, you can get an acre of land in a radius of 50 kilometres from Kampala city centre in any direction at ugx10million. And with the ongoing building of roads, aiming to live 50kms from the city centre is the right thing. Between five people, this will be a 65ft x 130ft plot for each. And at 50kms, it will be prime space in five to ten years. And let’s face it, even if you earn five or ten million shillings a month, this is a smart way to spend the ‘pocket change’ of 150k/month which you can otherwise ‘eat’ or drink in one sitting. To continue with our ‘poor’ group whose members each contributes 150k a month, in the second year they will accumulate another ugx10 million. But in the meantime, they have, following your advice have been cultivating on the one acre, after contracting a neighbor to maintain it while keeping an eye on your crops. At today’s prices, they can easily make a profit of ugx2million times three seasons per year on the acre (after paying the caretaker) by growing one of the common grains. But they should not get too ambitious to dabble into too many things like poultry or piggery which they are not experts at and rather remain focused on developing their mini estate, to avoid stress. The cultivation is basically to keep their land busy while showing occupancy and hopefully, it can fetch you an extra 6m in the second year, but not much longer, as construction work once it starts, will not allow farming. Armed with their ux16million or so, they can confidently kick off the building project, by doing the foundation and a central drainage/sewage infrastructure for the five units. They should then start injecting their 750k per month over the next three years. I cannot speak for any bank but our ‘Smart Five’ should be in position to negotiate for a facility to finance the project which will already have taken off, so that they can benefit from the economies of purchasing materials in bulk, as they continue depositing their monthly 750k to pay it off. This way, however lowly one’s job maybe, they too will be a “my house” in five years. And the kind of house in this scenario, is one that will be sellable at between 50 and100 million shillings at the time of completion. Remember it will be sitting on a 65 x 130 in what will then be a heavily populated neighborhood. 

 By Joachim Buwembo