Diplomacy and Economic Development: Taking Stock of China-Uganda Relations

by Admin (Posted on June 9, 2023June 9, 2023)

By Nanziri Christine

The world today considers diplomacy vital in shaping and developing countries’ economies. As a landlocked country in East Africa, establishing diplomatic relations with various countries is considered one of the ways to boost Uganda’s economy. Through economic diplomacy from both sides, to a greater extent, Uganda continues to attract Chinese investments in different sectors a trend that started 60 years ago and improved from strength to strength in the last two decades that today, for consecutive years, China tops Uganda’s source of foreign direct investments!

China’s role in Uganda’s economic development is evident in various forms, including infrastructure development, education, health, agriculture, and trade. Last year, the two countries celebrated 60 years of diplomatic relations. China was one of the first nations to recognise the newly independent nation, Uganda, and the relationship between the two has been strengthened by China’s policy of non-interference in internal affairs of others.

China has been involved in Uganda’s infrastructural development, positively impacting the economy of Uganda as a whole and neighbouring countries. Examples include the construction of Uganda’s largest hydropower dams, Karuma and Isimba power dams, which have increased Uganda’s electricity generation capacity. Other China supported infrastructure projects include roads, with China funding the glamorous Entebbe express highway.

China has equally positively impacted Uganda’s healthcare sector. China has so far sent 21 medical teams to Uganda to support its medical healthcare services plus building a 100-bed – China-Uganda friendship hospital (Naguru hospital) to boost Uganda’s health. When the Covid 19 pandemic broke out, as the rest of major economies of the world embraced vaccine nationalism, China religiously amplified her support donating the much-needed medical supplies to Uganda.

The Agriculture, fishing and trade sectors have also been developed through China’s training programs and the provision of equipment. For example, the Aquaculture Research and Development Centre Kajjansi also known as China-Uganda Friendship Agricultural Technological Demonstration Centre is one of many vivid examples in this sector.

Relatedly, working with the United Nations’ Food and Agriculture Organization (FAO), in 2009 China introduced a new programme dubbed FAO-China South-South Cooperation (SSC) and created a FAO-China Trust Fund with $30 million to specifically support Uganda’s agriculture sector. In 2015, China launched the second phase of SSC and injected $50million before adding another $50million in phase III which was launched in 2021. During implementation of SSC’s phase II, China funded and sent 47 Chinese agricultural experts and technicians on a two years mission to train Ugandans to improve technologies used in production of rice, grapes, cherry tomatoes, foxtail millet, and apples among others. The project focused on exchanging mechanisation, agro-processing and value-addition expertise. Considering the multiplier effects that comes with such projects, the role of China in Uganda’s agriculture sector cannot be ignored.

In trade, last year China announced a preferential trade arrangement for Ugandan goods granting zero-tariff treatment to 98% of imports from Uganda – a development that in many ways will widen the market for Uganda’s agricultural produce. Agriculture sector is the backbone of Uganda’s economy, with over 70% of the country’s population deriving their livelihood from it.

China has also invested in Uganda’s mining sector, majorly in the exploration of oil and gas. Uganda and Tanzania are seeking funding from China to develop an export pipeline before 2025. China’s willingness to fund Uganda’s oil sector leaves us in a privileged position to have China as a creditable development and business partner are evident. Future plans for the oil industry and exploration by the Chinese North Offshore Oil Company (CNOOC) by 2025 will boost Uganda’s economy, transforming the standard of living of the majority of Ugandans through job creation for both skilled and unskilled citizens in the oil and gas sector.

In human capital capacity development, China’s hand is visible. As of today, China has provided thousands of scholarship opportunities to Ugandans, including both short and long courses.

Generally, talking about Uganda’s economic development journey without mentioning China’s role makes the analysis incomplete. The unique part is that unlike other cooperation between Uganda and other traditional development partners, China-Uganda cooperation is partnership of equals, mutual trust and is based on win-win cooperation.

However, Sino-African critics have always claimed that Chinese development assistance especially infrastructure funding is leaving Uganda and some other African countries heavily indebted with the so-called debt trap. However, while we cannot completely dismiss voices against over borrowing, such sweeping statements should be cautiously listened too. Today, as a result of global politics and changing global order, it is clear that there is a calculated move meant to discredit Sino-Africa relations which has seen many of critics cherry-picking facts when it comes to critiquing China’s development assistance to developing world. However, to allay fears of critics, Uganda and in general all developing countries should aim to remain responsible borrowers and only go for loans when very necessary. Otherwise, it is unfair to carry on sweeping statements of the so-called debt diplomacy and misinterpret China’s good will of offering development assistance that China is hiding what critics claim to be ulterior motives.

In conclusion, it is indisputable that China plays a major role in Uganda’s economic development. The relationship between the two countries is characterized by mutual benefit and cooperation, with both countries working together to promote economic development and improve the wellbeing of their people and build a community of shared prosperity for mankind. It’s pertinent therefore for countries around the world to continue cooperating in order to ensure that economic development is experienced by all nations and build a world of shared future with shared prosperity.

Nanziri Christine is a law student at UCU and a Junior Research Fellow at Sino-Uganda Research Centre.

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