March 13, 2019
In Uganda’s Capital, Middlemen Discover the Gap Between Buyers and Sellers
March 13, 2019
In Uganda’s capital city, rapid growth means high demand for housing and services, and some enterprising Ugandans have made careers for themselves as middlemen. But connecting buyers and sellers isn’t always a win-win.
KAMPALA, UGANDA — When a taxi driver insists that Micheal Mujjeje pay an extra 500 Ugandan shillings (about 13 cents) because it’s rush hour, he doesn’t hesitate. He’s in a hurry.
Today, Mujjeje must turn the city upside down to find an apartment for a discriminating client.
Sylvia Tushabe, the client, wants it all: decent, serene, accessible – and with a gate. Those were her words, and Mujjeje is out to make it happen.
“I know of such an apartment in Mukono on Jinja Road, another one in Nabbingo on Masaka Road and another one in Bwebajja on Entebbe Road,” he tells her.
Tushabe doesn’t hesitate either. She’ll have to pay Mujjeje for every apartment he inspects on her behalf, but she’s willing to foot that bill. Mujjeje is thrilled.
“The more apartments we inspect, the better for me,” he says. “I demand an allowance for my energy as we traverse the city looking for good accommodation.”
Uganda’s annual urban growth rate is about 4.5 percent, according to World Bank data. The urban population is expected to reach 20 million by 2030, up from 13.3 million in 2010.
That growth creates a pressing need for housing. And with a penchant for finding moneymaking opportunities at every turn, Ugandans who don’t mind hustling back and forth across this capital city have created a new niche career option.
Mujjeje is a broker. Every time he finds an apartment that someone opts to call home, he earns the equivalent of one month’s rent from the tenant as well as 10 percent of that month’s rent from the landlord. On top of that, he rakes in what he calls “fuel” – a fee for his time moving back and forth across the city.
Brokers work in other sectors, too.
Edna Namara, GPJ Uganda
Margaret Nabukwasi operates a salon that stays in business in part because brokers keep clients coming in the door.
“I have to contract some girls who will bring me customers,” Nabukwasi says. “I pay them a one-off of 3,000 shillings for every customer.”
That’s about 81 cents – a small portion of the 25,000 shillings (about $6.70) Nabukwasi charges her clients.
Peter Ekodeu, general manager of the Grand Global Hotel, says his brokers work on a 20 percent commission. In some cases, brokers walk away with 10 million shillings ($2,675), if they bring in a group of clients for a weeklong workshop.
But this trend of brokers matching clients to products or services isn’t always a win for everyone. Brokers engaged in real estate tend to set their own rates, which can cause problems.
Khadija Nakakande, senior public relations officer for Uganda’s Ministry of Trade, Industry and Cooperatives, says brokers should formalize their services and register as proper businesspeople, so that they can be held accountable. Otherwise, Nakakande says, their work creates serious inconveniences.
That was true for Obed Kimbugwe, who wanted to sell a plot of land. Brokers inflated the price so much, hoping to walk away with some of the cash, that no one made an offer.
“No one could buy the land because it was so expensive,” Kimbugwe says.
Mujjeje acknowledges that his work isn’t always smooth. Sometimes he spends a month or two looking for a client.
But on the day he went apartment hunting for Tushabe, he got lucky. Tushabe signed a lease for an apartment that costs 600,000 shillings per month (about $160). She gave an equal amount to Mujjeje for his services. He also walked away with an additional 60,000 shillings (about $16) from the landlord. In Kampala, the average monthly household income is just under 940,000 shillings (about $250).
For Mujjeje, it was a good day.
Edna Namara, GPJ, translated some interviews from Luganda.
Editor’s note: This story has been updated to reflect the order of one source’s name.