By Stephen Bwire
China’s interest in Africa has been growing steadily over the years. Following the death her celebrated founding father of the modern Republic, Mao Zedong, China rebranded its economic policies culminating into the current economic boom and renewed incursions into Africa. The first Chinese company set foot in Uganda in 1993 and as we speak now, about 350 Chinese companies have been licensed to operate in Uganda. Currently, Chinese companies hold a major stake in the major sectors of the economy – manufacturing, infrastructure development, hospitality industry and others.
With an estimated US$ 6b financial aid to Uganda in the last 15 years, US$ 800m investment by Chinese companies that employ about 30,000 Ugandans and a US$ 450b bilateral trade makes China one of the top providers of Foreign Direct Investment (FDI) to Uganda. In the last 17 years, investment by Chinese companies worth US$ 2.5b has been established in Uganda. The earliest project in Uganda to be undertaken by China was the 40,000 seater Nambole National Stadium constructed with a grant of US$ 30m. China also provides duty-free market for Uganda products; unfortunately far more imports from China find their way into Uganda than what Uganda exports to China.
In the last 5 years, Uganda has contracted loans worthUS$ 5.7b out of which US$2.1b is from China. The flagship projects include; US$ 789.3m for Karuma power dam, US$ 482.6m for Isimba power dam, US$ 200m for expanding and upgrading Entebbe Airport, US$ 36.3m for the twin tower Presidents office, expansion of Parliamentary building, reconstruction of the dilapidated Naguru hospital, US$ 1.9b in the oil sector, phosphates factory in Tororo, the expansion of the Kampala-Entebbe highway, construction of the Kampala-Entebbe Express highway, an industrial park in Luwero, construction of the Standard Gauge Railway.
A joint venture between Uganda and Chinese banks provides a direct money transfer service for Uganda based companies. Low interest rate loans provided by China commercial banks are attractive to borrowers. China’s no-strings-attached and low-interest rate loans are preferred to those of World Bank and IMF that come with conditionalities over democracy and good governance. The 1995 China- Africa summit sealed three terms: non-interference, respect for sovereignty, and equality for mutual respect. The Beijing consensus based on equitable development and respect for sovereignty as opposed to Western consensus based on market forces is more preferable for Africa and much of the developing world which couldn’t stand the sheer weight of Western capitalism.
President Yoweri Museveni has repeatedly praised China’s string-free grants for non-interference in the internal affairs of other countries. During his swearing in ceremony in May 2016, Museveni once again praised China; “…..these people are our genuine friends. They have no arrogance. If a man has his own house and he goes in another man’s house … What type of fool are you?” Earlier on the Minister of State for Foreign Affairs, Okello Oryem who has been at the forefront of promoting China’s interests in Uganda publicly stated thus: “This is China’s time. USA and European countries had the opportunity to build Africa (but they did not succeed. Now the Chinese are building schools, dams, stadiums, hospitals, roads, etc. Has the song about democracy and human rights turned us into a developed country? If I want to give you a chicken or a goat do I first ask you whether you beat your wife?”
However, Uganda’s bilateral development with China does not favour capital inflow because technologic transfer is non-existent as all the technical work on such projects is done by Chinese expatriates. Chinese nationals have been flocking Uganda and engaging in all sorts of retail and wholesale trade prompting the locals to bitterly complain against unfair competition. Chinese substandard and counterfeit products flood the market in Uganda without hindrance. Construction companies import construction materials from China to the detriment of local industries. President Museveni recently declared that Chinese should not be involves in petty trade.
The Chinese language has been introduced into the educational curriculum with 20 schools selected schools teaching Chinese and government is to import Chinese teachers to train Ugandan teachers.
