Share this article

The Physical Infrastructure Committee of Parliament has recommended the full capitalisation and acquisition of the National Housing and Construction Company (NHCC) outlined in a report, committee vice-chairpeson Tony Awany (Nwoya county, NRM) tabled before the House budget committee chaired by Remegio Achia (Pian County, NRM).

The Physical Infrastructure Committee of Parliament has proposed the complete capitalization and acquisition of the National Housing and Construction Company (NHCC), as detailed in a report presented by committee vice-chairperson Tony Awany (Nwoya County, NRM) to the House budget committee, which is chaired by Remegio Achia (Pian County, NRM).

“The committee recommends that the capitalisation balance of shillings 88 billion be paid to National Housing Corporation in the budget of Financial Year 2025/26. The Ministry of Defence and Veterans’ Affairs prioritises the payment of shillings 29.7billion to National Housing Corporation in the budget for the FY 2025/26 for payment of the debt,” Awany stated.

Divestiture

NHCC was established by an Act of Parliament in 1964 and was fully owned by the Government of Uganda until 2005.

It was then transformed into a private limited liability company as part of the privatization drive. During this process, 49% of the shares were sold to the Government of Libya.

As part of the deal, NHCC’s shares, valued at $20.3 million, were used to offset part of the $95 million debt owed to Libya. Essentially, this transaction amounted to a debt swap, as no physical funds were appropriated to NHCC. The remaining debt was divested in shares of Uganda Telecom Ltd (UTL), among others.

At the time of privatisation, NHCC’s total share capital was valued at $20.3 million (approximately Sh35.7 billion).

Despite the funding challenges, the company continued to operate using its assets and internally generated funds. By June 2021, management had successfully grown the company to a value of shillings 609.2 billion.

Asset audit

However, earlier in 2012, under the guidance of the board, PricewaterhouseCoopers had conducted a business valuation, which confirmed the company’s assets at shillings 609 billion.

The assets were allocated according to the shareholder structure, with the Government of Uganda (GOU) holding shillings 310 billion and Libya holding shillings 298 billion.

Based on this valuation, an immediate capital requirement of shillings 250 billion was identified for annual funding. A capital call of shillings 231 billion was made, with proportional equity injections expected from both shareholders.

Debt situation

The Ugandan Government’s contribution was shillings 118 billion, and Libya’s share was 113 billion, both of which were paid in FY 2021/22, leaving a balance of 88 billion.

Although the balance was budgeted for in FY 2022/23, it was never realised due to budget cuts.

Shillings five billion, with 16 billion expected in the third quarter of the current fiscal year and an additional 29.7 billion scheduled for repayment next year.

They contend that this funding is crucial to realising President Yoweri Museveni’s vision of providing affordable housing for public servants, the armed forces, and the general public

On January 14, 2020, while presenting the budget framework paper for the 2020/21 financial year to the sector committee chaired by Eng. Kafeero Ssekitoleko, then state minister for housing Chris Baryomunsi revealed that efforts to reclaim NHCC were already underway.

Baryomunsi attributed the move to Libya’s failure to fulfil its commitments as a 49% shareholder, a situation which had been exacerbated by the political turmoil that followed the 2013 ouster of Col. Muammar Gaddafi (RIP).

He further noted that concerns had arisen over the composition of the NHCC board, where many Libyan representatives allegedly were not recognised by the sitting Government in Tripoli.

At the time, Baryomunsi hinted that the Government was studying modalities of compensating the Libyan government to reclaim full ownership of the firm in a move which was poised to attract investment.

“The Government will get a way of buying off the shares which are held by the Libyan government. So that government can gain 100% shares or even find some Ugandan companies to buy these shares,” he stated.

Budget cuts

However, a year down the road, on January 28, 2021, while presenting the 2021/22 budget framework paper to the same committee, Baryomunsi revealed that the takeover efforts had been stalled by budget cuts.

“This company requires shillings 231 billion but they only have 174. But they have not completed some projects because here in Namungoona, they have 194 units which are incomplete,” he remarked four years ago.

It remains to be seen whether the MPs’ recommendation will finally receive the action it warrants.