By Akech Sarah Elias
In international relations and foreign policy, diplomacy is considered to be a major catalyst for good relations of countries and a step-in introduction and implementation of social-economic development projects of a country. Like in human beings, good cooperation and relations among countries which is always characterized by effective diplomacy, international relations and foreign policy aid in promoting development of countries; because, in most cases, it is diplomacy that influence countries where to invest or which country to cooperate with. In that process, a country with good relations with neighbors and beyond is most likely to attract investments and developmental cooperation from such countries as opposed to those without or with shaky relations. Also, diplomacy and good relations of countries especially among neighbors and arguably beyond are key when it comes to promotion of stability which is very key in economic development.
Talking about foreign policy and diplomacy, whereas it is true that foreign policy is a guiding framework for national interests, and that it facilitates countries in determining their goals, values and national interests which results into formation of alliances and treaties, formed alliances and treaties at times are meant to strengthen one country against the other or indirectly promote hegemony. This explains why some countries especially from the west often impose conditions for their relations with other countries acting as superior other than equal partners as United Nations charter dictates that all independent countries are equal!
However, when it comes to China-Uganda relations and broadly, China-Africa cooperation, the two sides cooperation are a text book example of partnership of equals and win-win cooperation. For several decades, China has always based its relations with African countries guided by principles of sincerity, real results, win-win cooperation, amity and good faith while dealing with African countries! It is these principles today, that guide Sino-Uganda relations and in many ways, both sides are benefiting from this this brotherly cooperation.
In economic engagement, China’s engagement with Uganda has been characterized by substantial investments and collaborative projects. A 2021 report by the UN Conference on Trade and Development revealed that China had become one of Uganda’s largest trading partners and a major source of foreign direct investment.
Further, a 2019 report by the famous Brookings Institution, observed that China has also been actively involved in infrastructural development in Uganda with the main focus on transportation oil and energy and the report argued that such investments are key for Uganda’s social-economic development explaining that China is doubling down investments in Uganda and generally African countries key sectors at a time when fewer funders are willing to support infrastructure projects. One prominent example is the Kampala-Entebbe Express highway which was constructed with the help of Chinese funding. This project has enhanced connectivity, reduced transportation costs, and boosted trade within the country registering thousands of users daily.
China’s economic engagement with Uganda has been boosted by bilateral trade and investment agreements and treaties. A case in point follows the signing of the Free Trade Agreement in 2018 by the two nations which have fostered trade expansion. With China granting up to 98% of Uganda’s taxable items zero-tariff into their market, one can safely argue that trade between the two countries will grow further with Uganda’s agriculture sector benefiting more.
Still on economic benefit of a flourishing Sino-Uganda relations, the May 2021 China-Uganda Authorized Economic Operator (AEO) which came into force on 1st June 2023 will see the two friendly countries enjoy preferential policies in terms of document review and goods inspection. This will definitely facilitate the customs clearances of goods between the two countries thereby facilitating trade and by extension easing the work of Uganda Revenue Authority.
With AEO, Uganda will benefit from this arrangement in terms of streamlining trade finance and
revenue collection which is aligned to China’s Revenue collection practices and enhancement of
trade framework. If critically analyzed, the main informing aspect for Uganda to enter this mutual arrangement was on a basis of China’s stand on the global floor of trade. The arrangement was also meant to further the corporation between Uganda and China on the basis of the Forum on China-Africa Cooperation (FOCAC). This way, Preferential treatment will be accorded to the goods coming from China to Uganda and vice versa thereby strengthening trade between the two countries.
As a result of the good relations between the two countries and enabling environment, as of 2022, China’s direct investments in Uganda reached 131 billion US dollars. And, since the start of this year, Chinese enterprises in different fields such as food processing, mobile home appliances and textile industries have entered into Liao Shen Industrial Park and China-Uganda Mbale industrial parks injecting over 84 million USD in Uganda’s economy. Also, over 2200 jobs for locals have been created as a result of the said investments.
In conclusion, as a result of China-Uganda relations, the benefits coming from the said relations have been key in Uganda’s economic development process and hence. Therefore, despite some challenges and criticism especially from Sino-Africa skepticists, China’s significant role towards Uganda’s economic development cannot be ignored and the two sides as the two countries embark on building a community of shared future and prosperity in the new era.
Akech Sarah Elias is a visiting researcher at Sino-Uganda Research Centre and a law student.