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UGANDA’S NEW DAWN

Kampala shopping centers signal new era of relative stability

BY CURT HAZLETT

Ugandans know what it means to suffer. From dictator Idi Amin’s killings of a half million people through the 1970s to the poverty that afflicted the East African nation after his downfall in 1979, Uganda has endured hardships that Westerners can barely imagine.

But in some ways, the country may be on the mend, thanks to nearly two decades of increasing political stability that helped strengthen the national economy. And with things looking up, Ugandans are doing what comfortable people everywhere do: They are shopping. That has led to a wave of shopping center construction that is reshaping the sprawling capital city of Kampala and its suburbs and changing the way many Ugandans live in the process.

“There is a kind of shopping mall construction craze running this city,” said local architect Abdu-Wahab Nyanzi. “Every corner of downtown Kampala is being eaten up by mini shopping malls, and they are fully let by the time roofing begins.”

He is not the only one to say so. “There is definitely a boom taking place,” said Nimisha Madhvani, first secretary for commerce and investment at the Uganda Embassy in Washington, D.C., who was educated at Bryn Mawr (Pa.) College. “There has been a lot of growth in the area because there has been a lot of pent-up demand.”

Uganda’s relative stability, largely a result of the democratic reforms of Yoweri Museveni, the president for the past 19 years, has encouraged expansion by such international players as South Africa’s Shoprite Checkers Properties, the continent’s largest food retailer. Last year Shoprite opened its second supermarket in the region, anchoring the new, 133,000-square-foot Lugogo Mall. Other tenants include branches of Uganda’s four largest banks, an optometrist’s office, a Game department store and a pharmacy.

Kampala has two other large centers: Pioneer Mall (the city’s first) and Garden City Mall.

This growing market’s newest entry is going up in Wandegeya, near Makerere University, where local developer Moses Kalungi is building what he says will be Kampala’s largest mall. The nine-story Sun City Shopping Centre, set to open late this year, will cost $12 million and feature apparel retailers, movies, a nightclub and a supermarket.

Consumer power
Driving Uganda’s retail growth is the emergence of consumerism, in a country with a history of desperate poverty. “More than half the population puts on secondhand clothes from downtown open markets,” said Nyanzi. But as incomes rise, more Ugandans are taking their business to the open-air centers, he says, where they can buy new clothing and shoes imported from Dubai, Hong Kong and Taiwan.

“Our economy has been growing, so the purchasing power of the people has increased,” said Dr. Maggie Kigozi, executive director of the Uganda Investment Authority, a government agency promoting economic development. “They have more capacity to buy, so retail shops are cropping up everywhere.”

In fact, Uganda’s economy has grown at an average annual rate of about 6 percent since 1997. The country is rich in natural resources such as copper and cobalt, and it is the world’s 10th-largest producer of coffee. On top of that, Uganda boasts some of the least-restrictive trade policies on the continent, and foreign investment is thriving. Kigozi says foreign firms invested $140 million in Ugandan construction projects last year.

Among the enthusiastic investors is Massmart, a South African retailer that owns the Game department store chain. Massmart spent $7.5 million to open its Lugogo Mall store, the first it has ever owned outright. (The chain’s 55 other stores in Africa are leased.)

“The opening of this Game store extends and complements our African growth strategy,” Massmart CEO Mark Lamberti said at the store’s opening, adding that the chain has been well received in African markets “that have traditionally been underserved.”

Commerce official Madhvani says Uganda is benefiting from the economic development that is spreading throughout the East Africa region. Beyond that, the political calm has lured back many expatriates who fled when Amin was in power, and the region’s natural resources are luring ecotourists in growing numbers. “The economy in Uganda is just beginning to move,” she said.

Troubled ‘pearl’
Still, Uganda faces huge problems. Per capita annual income is still a mere $240, and one in nine Ugandans is infected with HIV, though the government’s AIDS efforts have been praised as a model for the region. In Uganda’s remote northern areas, a rebel insurgency drags on after 18 years of fighting that has killed thousands of people and displaced more than 1 million more.

Those distant clashes, however, have had little effect on life in the capital city, on Lake Victoria in the country’s southeast corner. Kampala, whose natural beauty once inspired Winston Churchill to describe it as “the pearl of Africa,” was looted and badly damaged under Amin and his successor, Milton Obote, whom Museveni overthrew in 1986. Since then, though, the city has been increasingly regarded as safe and relatively modern on the back of the building boom — though such niceties as automated teller machines are only now catching on.

The shopping centers popping up all over Kampala are a far cry from their American cousins, however. Architect Nyanzi says most are tiny, with some stores measuring just 50 square feet. It is common for one retail tenant to sublet space to another, sometimes renting out shelf space on one wall. “The shopping centers here are built on far smaller pieces of land compared to what you have [in the U.S.],” he said.

The malls, too, are typically small. Lugogo Mall, he notes, provides parking for only 300 cars, though no one anticipates any great rise in vehicle ownership anytime soon, so small parking lots are no problem for now.

The stars of the retail boom are the supermarkets, which offer variety never before seen in Uganda. Shoprite and Uchumi, a Kenyan chain, are opening supermarkets “that are as big as any that I have seen in the U.K., filled with groceries and household items,” Kigozi said.

Is the day coming when American developers take a chance on Kampala? Even such an optimist as Kigozi does not expect that. Landlocked Uganda “is very far away from the U.S., and transportation is difficult,” she said. More likely, South Africans and Kenyans, with their long history of doing business in the country, will shape its retail future.

Whatever drives the retail boom, Nyanzi does not see it fading anytime soon. “The culture of shopping,” he said, “is just now growing here.”