Prime
Oil and gas boom and real estate in Hoima
Ronald R. Mugume
What you need to know:
- It has created a huge social divide between the poor and rich as the rent for existing moderate housing has been insanely hiked
The Albertine region in western Uganda is home to the country’s largest oil and gas reserves, estimated at 6.5 billion barrels of oil in place. Since the discovery of commercial oil deposits in 2006, the region has witnessed a surge of economic activity, infrastructure development, and population growth. However, these changes have also brought challenges and opportunities for the real estate sector in Hoima, the main city in the region.
One of the main effects of the oil and gas boom in the Albertine region is the increased demand for land and housing in Hoima. According to the Uganda Investment Authority, Hoima has experienced a rapid urbanisation rate of 5.6 percent per annum, compared to the national average of 3.4 percent. This has led to a rise in land prices, especially in areas close to the oil fields, the refinery, and the airport. For instance, a plot of land that used to cost Shs1 million in 2006 now costs Shs 50 million or more. Those that have taken the road to the airport must have seen red sign posts indicating sale of acres of land at Shs 200 million each. This is land that is usually sold by speculators that bought it in bulk on notice of the discovery of oil.
The high demand for land and housing has also attracted investors and developers from within and outside the country, who see Hoima as a potential hub for business and tourism. Several projects have been initiated or completed in the city. These projects have created employment opportunities and improved the quality of life for the residents of Hoima that are now, more than ever, an extreme diversity. The fact that people are moving into Hoima from all over the country and the world, they would not want to have a huge change in their quality of life. This is why the quality of housing needs to be as good as where they are coming from.
The almost completed airport in the Kabalega Industrial Park has also presented lots of opportunities such as the country’s choice of having a national stadium in Hoima. This is golden opportunity for real estate developers. The games at the stadium including those of Africa Cup of Nations 2027 will have individuals and families demanding quality hotel and housing services.
The existing properties are just not enough and of the desired quality. I imagine sport-loving families wanting to have fully furnished apartments close to Mparo, where the stadium will be. This is a virgin area with golden chances.
However, the real estate sector in Hoima also faces some challenges and risks, such as land conflicts, environmental degradation, and social disruption. The population influx has made housing so expensive that locals can no longer afford to rent in good and secure places, pushing them to the outskirts of the city that end up becoming slums. The danger in this is that many of these people who are predominantly youth, have failed to get jobs in the oil and gas sector due to skills mismatch leading to social problems such as crime, prostitution, drug abuse and HIV/Aids.
The oil and gas activities have led to changes in land ownership, displacement, and migration, which have caused disputes and grievances among the local communities, the government, and the oil companies. Even with the compensations and resettlements carried out in these areas following land acquisition, minorities still have grievances and others still suffer the shock of these changes for example, most of the people who were given huge sums of money as compensation, now live in poverty after letting their land go. Furthermore, the influx of migrants and workers has increased the pressure on the social services and infrastructure of Hoima, such as education, health, water, and sanitation.
Whereas the boom in the oil and gas sector has already accelerated growth in Hoima City regarding real estate as more properties are coming up and property owners reaping big, it has created a huge social divide between the poor and rich as the rent for existing moderate housing has been insanely hiked.
Mr Ronald Raymond Mugume @iRaymondMugume
