Experts have said despite the problems the country has faced in the past few months and the Coronavirus pandemic, Uganda is still a preferred destination for foreign investors.
Uganda last month held its general elections which were preceded by chaotic campaigns that also included the deadly November 18 and 19 riots in several parts of the country.
Speaking during the launch the 2020 Kampala market review and the 2021 outlook on Wednesday, Marc Du Toit, the head of retail at Knight Frank Uganda said the retail real estate sector has registered some expansion in terms of new investors in the country.
“The sector has registered new entrants into the market in 2020 with Carrefour growing its presence in Uganda at Metroplex Mall store, Shoprite set up to expand its store number six with an anticipated opening of the Arena Mall(at Nsambya traffic rights) in March 2021 and LC Waikiki a Turkish based international fashion chain opening its 2000 Africa flagship store at Acacia Mall in December 2020,”Du Toit said.
In January last year, Carrefour, one of the largest hypermarket and supermarket chains in the world officially launched its operations in Uganda marking the company’s entry into the Sub-Saharan African country whereas in December, 2020 Turkish fashion retail company, LC Waikiki extended its wings to Uganda as the second country in East Africa to host their shops.
The real estate sector expert from Knight Frank noted that the Coronavirus lockdown resulted into the increased use of online retail shopping platforms by consumers and e-commerce retailers saw a trade spike significantly during the lockdown, adding that this partly explains the increased number of retail companies setting up in Uganda.
“Uganda has historically been seen as a safe destination regardless of the current situation due to the election. What attracts people to Uganda are the demographics unlike other neighbouring countries. For example Rwanda is a small fraction of the economy of Uganda. When investors look for the market, they look for the future and can’t put infrastructure is the consumer spending and the size of the economy,” Du Toit told journalists.
He noted that on the other side, Kenya has been negatively impacted by issues like regarding imports and logistics.
According to the official from Knight Frank, the recent decision by President Museveni to return the Landlord and Tenant Bill back to parliament has also encouraged many direct foreign investors into the country.
However, according to Judy Rugasira Kyanda, the Managing Director for Knight Frank, the current political situation will in one way scare away potential investors if not handled well.
“Investors don’t want noise and chaos. With such riots in the city where many businessmen spend days with their shops closed. This has given a bad image of the country to investors.Many investors have therefore shifted from the central business district to suburbs which is not good for natural growth of the economy,”Rugasira said.