Overview:
Uganda's housing ministry wants the government to reclaim Libya's 49% stake in the National Housing and Construction Company, blaming sanctions for its woes.
Uganda’s housing ministry has asked the government to consider taking back the 49% stake held by Libya in the National Housing and Construction Company (NHCC), saying international sanctions linked to the shareholding are crippling the state-owned developer.
The minister of state for housing, Persis Namuganza, put the proposal to a parliamentary committee reviewing the housing sector.
She said the sanctions were cutting into the company’s budget, blocking new investment and deterring potential partners.
“No serious investor wants to get into a partnership that is under international restrictions,” a senior ministry official told MPs.
Libya acquired its stake in 2005 through a debt-for-equity deal. In exchange, it cancelled interest and penalties on money Uganda owed, while the Ugandan government kept the controlling 51%. The swap wiped out US$88m in interest and penalties on a US$184m debt, and the Libyan stake was valued at about US$20m.
The sanctions the ministry blames are not aimed at Uganda. They stem from a UN asset freeze imposed on Libya’s sovereign wealth during the 2011 uprising against Muammar Gaddafi, which restricts investment that would grow the fund. The freeze remains in place, though the UN Security Council has recently allowed some limited reinvestment.
Namuganza also complained that the sector was starved of money. She said the government needed to put in 3tn Ugandan shillings (about $800m), or 500bn shillings ($135m) a year, to build more than 5,000 homes annually.
The need is far greater than current output. Uganda’s housing shortfall is put at 2.4 million units, but only about 60,000 are built each year – well below the 300,000 targeted under the country’s national development plan.
The committee had recently studied Morocco’s approach to affordable housing. Its chairman, Edson Rugumayo, said fresh government money could change the ownership structure and give the state more room to use NHCC to build affordable homes.
The minister said the finance ministry had ignored her advice and imposed new taxes on building materials in the 2026/27 financial year, pushing up the cost of houses.
MPs also criticised the Uganda Investment Authority for giving land to factory investors while overlooking housing for workers.
The committee told the ministry to bring a formal cabinet paper on reclaiming the Libyan shares, along with a plan for better funding of the sector.