Introduction
The liberalization of the Ugandan economy since the early 1990s has spurred development in a variety of sectors bringing with it an upswing in the construction industry. The rehabilitation phase that lasted between 1986-1990 saw a number of public and private residential, commercial and institutional premises rehabilitated. The housing stock especially the low cost houses however still fall short of the housing demand, which has led to increased demand for buildings and construction materials in the country.

Economic importance of the sector
The construction industry has played a pivotal role in the socio-economic development of Uganda. Its role ranges from providing infrastructure support to factors of production for other sectors of the economy. Specifically, the construction sector is emerging as one of the leading employers in the country. A total of over 5,000 Ugandans are employees as engineers, surveyors and porters in the sector on permanent basis while almost twice that number is employed on temporary basis. The sector is also one of the major tax payers to government.

Performance of the Sector
The construction industry has continued to grow at an average rate of 10.2% per annum since 2000/01. This is far above the overall GDP annual growth rate for Uganda. The growth has been attributed to the country’s new investment in buildings and structures. As the economy continues to grow, there will be increased opportunities for investment in the sector. The demand for building and construction materials is based on shelter models. National requirements for roofing materials are estimated at 143,438m per annum while that for bricks is estimated at 9,711 tonnes.

The construction industry also recorded significant growth in demand for clay products, sand, gravel and aggregate, which although difficult to quantify are readily available in most parts of the country.

Management of the Sector
The Ministry of Works, Housing and Communications is the department that runs the construction sector in Uganda. The ministry provides policy guidelines and funding for the major state development strategies. It also plays the mediation and advisory roles to all the stakeholders in the sector.

The Ministry undertakes the housing and construction programmes through the National Housing and Construction Corporation (NH & CC), a public enterprise that was established by the National Housing and Construction Corporation Act No. 7 of 1964. It was later repealed and replaced by Decree No. 19 of 1974. To-date, the Corporation is governed by the Public Enterprises Reform & Divestiture Statute, 1997.

Since establishment, the Corporation has constructed over 1,700 executive flats, maisonnettes and bungalows in various residential areas in Kampala and upcountry. Apart from providing basic shelter, the Corporation has also made its contribution towards the Country’s infrastructure by constructing Entebbe Airport Road, Schools, Shopping Centers, Office and Hospital Blocks. The Corporation still provides Ugandans with affordable, safe and high quality homes that make their lives better.

The Corporation is however earmarked for privatization during the 2004/05 FY. Government plans to divest 49% of its interest in the Corporation to the private sector. As part of the privatization process, the Corporation sold off 75% off its shares in Uganda Clays Limited (UCL). But the Corporation still enjoys a cordial relationship with UCL, a company that produces tiles used to roof majority of Corporation’s houses.
The Corporation also owns 50% of the shares in Housing Finance Company of Uganda Ltd. to facilitate the selling of its houses and promote the growth of the housing industry. It also has shares in a Pan African Development Bank, Shelter Afrique based in Nairobi.

Latest developments
in the sector

Casements links up
with SA firm:
Casements (Africa) Limited, makers of a wide range of building materials and fittings in Uganda, has sealed a partnership deal with South Africa’s Trellidor Security Group Limited, to sell their products here. Analysts say this development is an indicator that the local market has become more appealing after the signing of the East African Customs Union. The Security Group will stock all their products in a warehouse here, in addition to training personnel from Casements. These will in turn offer marketing, sales promotion and distribution in Uganda. Trellidor started operations in Durban 30 years ago and now controls 70% of the South African market.

Akright plots construction strategy:
Akright Projects Limited, a private liability company registered in 1999 had put 500 acres of land under development, some of which has already been sold out to private developers. The company has also purchased another 800 acres of virgin land around Kampala for construction residential houses. The land is located in several areas, mostly along Entebbe, Masaka roads and in Gayaza. All the five estates to be constructed fall in the 500 acres, and a total of more than 100 houses have already been built between them. Akright’s investment currently stands at about US$7m (approx. sh15b). According to its five-year investment plan, the company intends to make a big impact on the housing sector by putting up in excess of 5,000 houses. Its main activities include the sale of serviced plots of land with model plans to private developers, construction of estate houses for private developers and the company itself. It also manages individual developers within the estates in addition to providing technical support.

32 UK firms
seek investment deals:
Representatives of 32 firms from the London Chamber of Commerce arrived in Uganda in June 2004 to explore investment opportunities and formation of joint ventures with local entrepreneurs in the construction industry. The delegation which included investors in manufacturing test equipment for the construction industry, held a series of meetings with private sector entrepreneurs and government officials.

Law on contracts coming:
Large firms, especially international ones operating in Uganda would be required to sub-contract with local small and medium enterprises before being awarded tenders in the construction sector. In a memorandum to government, private sector members noted that small firms often lose out on local bids in the construction industry, due to insufficient capital and sub-standard work. They therefore urged government to force the well-established companies sub-contract the local ones to enable the latter get the required experience.

Roofings widens market:
Roofings Limited, established in 1994 has increased its market share to 55% in Uganda. The company also exports its products to Rwanda, Burundi, DRC, Northern Tanzania and Southern Sudan. The company also increased its investment to US$22m in 2004 from US$2m in 1994. The company achieved ISO 9002-quality certificate in 1999 and the product certification for roofing sheets from the Uganda National Bureau of Standards in 2000. The company employs a total of 650 employees and paid about sh13b in taxes to the Ugandan Treasury.

Housing Policy
The National Housing Policy and Shelter Strategy remains the blue print for an orderly and integrated development of the housing sector in Uganda. Although it is still under review, the policy has provided an enabling approach used to monitor the implementation of United Nations Habitat Agenda. The policy also assists the local governments develop their respective Local Action Plans for human settlement development.

The National Housing Policy and Shelter Strategy also focuses on the divestiture of all unsold pool houses and non-core institutional houses and utilizing the proceeds for mortgage financing for purposes of increasing housing stock countrywide. It also proposes the utilization of the sale proceeds and the implementation of the Public Servants Housing scheme, Integrated rural housing improvement programme and replication of the slum upgrading schemes in urban areas. Government is still finalizing plans to enact the Building Control Bill to harmonise all provisions relating to the construction of buildings and houses in accordance with the safety standards. The Act will provide a framework for technical, advisory and supervisory services to various stakeholders with a view of ensuring compliance to safety standards. There is however doubt that the Bill will passed during the 2004/05 FY.

Major Urban Developments
Almost all the major urban developments in Uganda over the last one year have taken place in Kampala City. Although there have been several road and building construction activities in many other smaller towns countrywide, the major ones have been undertaken in Kampala. Most of them have been joint venture undertakings between government and the donor community. They include the following:

Nakivubo Channel completed:
The sh23 billion Nakivubo Channel was completed and handed over to the Kampala City Council (KCC) in February 2004 after three years of rehabilitation. KCC offcials said flooding in the city centre was expected to be contained by the channel. The 9.1km channel may however flood once in 10 years in case of a heavy storm. The culverts and bridges over the widened channel can last 100 years. China Civil Engineering Construction Corporation (CCECC) rehabilitated the channel from Makerere Kivulu to Fifth Street in Industrial Area. Arab Consulting Engineers supervised the project which kicked off in October 2000. A total of 27 black spots, or areas which used to flood heavily, have been carried out under the project funded by the World Bank.

Construction of Northern Bypass Underway:
Work on the Kampala Northern Bypass started in May 2004 after the European Union (EU), the project’s lead financier, released the first installment of the allocated grant. The bypass is intended to reduce traffic congestion in the city centre by providing a relatively congestion-free route connecting the major radial route to the east, north and west of Kampala.

Kampala roads made one-way:
A total of 19 roads in Kampala City started operating as one-way streets in June 2004. Kampala City Council officials say the move is in a bid to improve the flow of traffic in the city centre. Dott Services Ltd, a private company was contracted to instal traffic signs on the roads to alert motorists about the changes. The roads that were transformed are located in areas with traffic congestion. They are; Short Street, Nakivubo, Nabugabo, Allen, Channel Street, Nakivubo Mews, Nakivubo Green, Nakivubo Channel, Nakivubo Place, Green Street, Ben Kiwanuka, Johnstone, William, Luwum, Burton, Dastur, Market, Market Square and Snay Bin Amir street. Plans are also underway to transform Queensway, one of the main city routes before the end of 2004. In addition, the roads around the Constitution Square will also become one-way streets in 2005. The one-way system is implemented under the Nakivubo Channel Rehabilitation Programme.

Naguru Housing Plan finalized:
Plans have been finalized for the commercial development of Naguru Housing Estate. The nearby Nakawa estate will also be re-demarcated into larger plots for a modern residential housing estate. Nakawa and Naguru tenants were given 90 days and 60 days respectively to quit. A total of 1,524 families reside in both estates. 246 of the units were condemned by KCC in June 2003.

Challenges facing the construction industry
The following challenges face entrepreneurs in the construction industry. First, there is a high level of fragmentation in the industry. This fragmentation has led to the establishment of incompetent firms that do shoddy work on construction sites. Matters are made worse by the fact that the laws are lenient in dealing with such constructors.

As far as the Nakivubo Channel project is concerned, there are still great challenges even if it was formally handed over to KCC and the government. Notably, there is still some residual flooding in parts of Kampala because storm water cannot drain fast enough into the swamp. Moreover, as the channel backs up, high pressure forces storm water into the Lake Victoria before the swamp has had time to filter it clean. There is therefore need to ensure that the channel ends like the fingers of a hand instead of a single mouth. This will speed up the release of water and disperse it more evenly over the swamp thereby improving filtration. Government should also make certain that the channel is reticulated.
Local constructors also face problems of delayed payments for their work. There are frequent court cases involving contractors and clients delaying payment. There are also a number of low and fluctuating construction activities.

Conclusion
Accelerated growth for the construction industry can only be attained by tackling the above challenges. Specifically, there is need to encourage innovative procurement mechanisms in the private sector to encourage investment and boost work opportunities for local contractors. A wide strategy of ‘Improving the Quality of Construction’ should be adopted in order to sustain the industry through the current era of industrialisation. Both government and private contractors should realize that the construction industry has grave and more varied problems that cannot be tackled by one group of individuals. Concerted efforts involving all stakeholders are required to drive the sector to higher levels.