By Shivansh Trivedi
Over the past decade, China has emerged as a key player in Uganda’s economic development. The country has invested heavily in infrastructure projects, provided significant loans and grants, and facilitated the development of key sectors such as energy and industry. This opinion explores the role of China towards Uganda’s economic development, identifying key strategies and approaches that have led to success so far while examining the benefits of these engagements.
China-Uganda relations dates back to 1960s before Uganda gained her independence from Britain. Since then, China has been actively involved in Uganda’s economic development largely through trade. Initially, this partnership focused on agriculture, trade and infrastructure projects, with China investing heavily in the construction of roads, bridges, and other key transportation networks. One notable example is the Kampala-Entebbe Expressway, a 51-kilometer highway linking the capital city to its international airport.
China has also played a major role in Uganda’s energy sector. The country has been grappling with power shortages for decades, which have limited economic growth and development. Chinese investments in hydroelectric power plants, transmission lines, and grid upgrades have helped to address this problem. One of the notable examples is the Karuma Hydroelectric Power Station, which has a capacity of 600 megawatts and is being constructed by Chinese company Sinohydro. The project is expected to significantly increase Uganda’s power generation capacity and reduce the country’s reliance on expensive imported fuels.
Apart from infrastructure and energy, China has also invested significantly in Uganda’s telecommunications sector. The country has been expanding its broadband connectivity and upgrading its digital infrastructure rapidly, with Chinese firms such as Huawei at the forefront of this development. Uganda has also signed agreements with China on the development of a national data center, which will help to consolidate the country’s digital infrastructure and enable it to better harness the benefits of the digital economy.
One notable case study in China-Uganda economic relations is the Entebbe International Airport expansion project. In December 2020, the airport unveiled its newly completed $200 million expansion, which was largely funded by the Export-Import Bank of China. The project involved the construction of a new terminal building capable of handling up to 5 million passengers annually, as well as numerous upgrades to existing facilities. This project is credited for creating over 1,500 jobs for Ugandans, while also facilitating greater connectivity and tourism opportunities for the country. In an interview with CGTN Africa, Works and Transport minister, Gen. Edward Katumba Wamala, praised China’s involvement in this project, noting that “the Chinese are not only investing in hard infrastructure, but also in soft infrastructure, which is a great catalyst for our economic development.”
If we analyze all sectors, China is playing a critical role in Uganda’s economic development. Its investments in infrastructure, energy, and telecommunications have helped to address key development challenges and unlock new opportunities for growth and prosperity. However, there is also a need to be cautious about the extent to which China’s involvement in Uganda’s development agenda is sustainable and aligned with the country’s long-term needs and aspirations.
Moving forward, Uganda needs to adopt an Afrocentric approach that is based on its own development priorities rather than those of its partners. This requires a careful balancing of interests and priorities, and a deep understanding of the implications of different investment models and approaches. It is important for Uganda to leverage its own natural resources and strategically position itself in key sectors that can drive long-term economic growth and transformation. The good news is that historically and in practice, unlike western development partners, China does not interfere in internal affairs of allies that it will resist such important moves.
For Uganda to maximize relations with China, it needs to adopt a holistic approach that goes beyond infrastructure, energy, agriculture, and manufacturing. This means diversifying its partnerships with China to include sectors such as tourism, health and education. While China has also been supporting Uganda’s health sector especially through its visiting medical teams, this sector can further be strengthened. In addition, Uganda should prioritize skills transfer and capacity building to ensure that Chinese investments are catalytic. This can be achieved through the establishment of joint training programs, technology transfer agreements, and collaboration between academic and research institutions. While China is already providing thousands of trainings and scholarships, this is an area that can be improved by offering more opportunities.
Uganda’s National Development Plan (NDP III) provides a useful guide for this approach, as it emphasizes a focus on promoting industrialization, job creation, and export diversification. The plan highlights key sectors that are critical for driving economic growth, such as agriculture, tourism, and manufacturing. Uganda needs to leverage these sectors and ensure that Chinese investments align with its own development priorities. With the many Chinese led industrial parks such as Kapeeka and Mbale, this will not be hard to achieve.
The cooperation between Uganda and China are textbook example of a win-win cooperation promoted by Chinese president, Xi Jinping. For example; For Uganda, the partnership with China provides a critical source of funding for key development projects that would otherwise be difficult to finance. It also facilitates the transfer of technology and skills, which in turn can contribute to long-term economic growth and diversification. Additionally, the partnership can help to position Uganda as a key player in regional integration and cooperation, which is critical for unlocking new opportunities for trade and investment.
For China, investments in Uganda represent an opportunity to expand its footprint in Africa and access new markets for its products and services. It also provides a way to diversify its own economic interests and reduce its dependence on traditional western markets.
In conclusion, China has played a critical role in Uganda’s economic development over the past decades. The partnership has focused on infrastructure, energy, agriculture, industrialization and telecommunications which are key in addressing key development challenges and unlocked new opportunities for growth and prosperity. Moving forward, Uganda needs to adopt an Afrocentric approach that prioritizes its own development priorities and maximizes the benefits of its partnership with China. This requires a careful balancing of interests and priorities and a long-term perspective that takes into account both short-term gains and long-term sustainability.
Shivansh Trivedi is a Research Fellow with Sino-Uganda Research Centre and a Contributor with Al Jazeera’s AJ Stream.