Research Journal of Economics & Business Studies - RJEBS - The ...

Is Real Estate Business the way to go in East Africa? A strategic analysis of
Uganda National Housing Construction Company Limited (UNHCC)
Nicholas khatotoh Makayi
School of Management, Shanghai University,China
&
Dr. Laaria Mingaine
Research Centre for Innovation and Knowledge Management, School of Management, Shanghai
University, China
Abstract
The development of business in Eastern African region is becoming very lucrative. One of the key
reasons of the profound interest in the region from the investor’s perspective is the progressing
economy. The investment environment in Uganda, Kenya, Tanzanian, Burundi and Rwanda (East
African Community, together with South Sudan, Sudan, Ethiopia and Somalia) now is substantially
better than it was a couple of years ago. The region is becoming of interest partly due to the discovery
of oil/gas, political stability as manifested by recent peaceful election in Kenya. Several multinational
companies like Tullow Oil plc, CNOOC, African oil corp. and others, have entered the region,
increasing demand for housing. East Africa is of particular interest to investors because the market is
still virgin. Without analyzing the market situation, an organization is practically doomed to failure
because it will not be able to forecast the future needs and demands of customers. This article,
therefore sought to carry out a strategic analysis on East Africa’s real estate business with particular
interest in Uganda National Housing and Construction Company Limited (UNHCC).
Keywords: Real estate business, Strategic analysis, UNHCC, East Africa
1. Introduction
The development of real estate in East Africa is nowadays very prospective, due to high concentration
of capitals and ample opportunities for investment in the region. One of the major reasons of the
profound interest in the region from the investor’s perspective is the progressing economy and the
growing efforts of the local governments to develop the open market economy (World Bank 2007).
The discovery of oil in the region has put pressure on offering decent and affordable housing. Laaria
(2013) while discussing school leadership challenges in the implementation of ICT in public secondary
schools, Kenya, viewed that the investment environment in the region recently have become
substantially better than it was a couple of years ago. Laaria & Rick (2013a) after analyzing
manufacturing strategy and its implication argued that Speaking about the real estate industry, it
should be noted that the industry is of particular interest to investors because the East African region
attracts large numbers of tourists which makes the development of the local infrastructure and real
estate industry quite profitable.
Companies attempting to enter the local market of the real estate industry may be accompanied by
serious difficulties because of the strong influence of the state (Solnik, 1996). At the same time,
companies supported or even owned by the state have a very well prospective and can expand their
business successfully (Jeon et al, 2011). In recent years, Uganda National Housing Corporation
Council (NHCC) has started implementing the strategy of region market expansion, entering new
markets and gaining a larger share in the markets. In such a situation, it is very important to analyze
the strategic development of the company and its management, assess its strength and possible
www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 08, June-2013 Page 69