Tag: Infrastructure

Beyond the Debt Trap Narrative: Examining China's Infrastructure Investments in Uganda

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By Shemei Ndawula

It is said that when you owe the bank one million shillings, you have got a problem, and when you owe the bank 1 billion shillings, the bank has a problem. The narrative of China’s Belt and Road Initiative (BRI) as a “debt trap” for developing nations has gained significant traction. However looking specifically at Uganda’s case with Chinese investment reveals a more nuanced picture, where China’s infrastructure investments are fostering sustainable development, not financial suffocation.

Contrary to popular belief, China can not pack up an airport or Hydro dam and ship it to Guangzhou. Aside from the physical extremities that such an ambitious project would demand there’s no provision in international and diplomatic law that would sanction such a venture.  With such a precarious state of affairs China is one of the few of our development partners who are genuinely rooting for our success because that is the only way they can ever recover their loans and get out of the “debt trap” we have put them in.

This is probably why Chinese investment in Uganda is always geared towards parts of the economy that compound development. Uganda, like many developing countries, faces a significant infrastructure deficit. Limited access to reliable power, transportation networks, and communication technology hinders economic growth and social progress. China’s BRI steps in by offering loans for projects that directly address these needs and Chinese state affiliated companies also occasionally tender cost effective bids for the projects.

Additionally Chinese projects in Uganda usually focus on revenue generation. Many of China-funded projects in Uganda, like the Entebbe Expressway or the Karuma hydropower dam, are designed to generate revenue and pay for their own setup cost.  Tolls collected from the expressway directly contribute to repaying the loan, while the hydro dam increases electricity production, leading to increased export potential and government income.

Our country’s debt-to-GDP ratio, while on the rise, largely  remains below internationally recognized thresholds for “debt distress”. The Ugandan government prioritises responsible borrowing and actively works with international institutions to monitor debt sustainability. The Chinese government also does a forensic feasibility study on each and every project before it’s implementation because as I may have pointed out earlier, it is in the Chinese best interest to avoid bad debts.

This is why China implements a zero tariff policy on 99% of Uganda’s export goods. Since China is a manufacturing economy, it is in their best interest to make sure that the farmer in Bududa has got a good road connection to the agro processing factory in Mbale industrial park to add value to his products before being exported to China and the rest of the world because then he’ll have the disposable income necessary to buy Chinese manufactured goods. It is hard to get similar concessions from countries who’s biggest exports are “democracy and liberalism“.

Without the pomp and fun-fare with which many other development partners launch their collaborations with domestic players; China goes a long way in collaborating with Ugandan companies and individual players and provides training programs, fostering technology transfer and creating skilled local workforces. This is geared towards empowering Uganda to maintain and manage infrastructure projects in the long run, reducing dependence on external expertise. An outstanding example is that many of the Ugandans working in  the Tilenga oil enterprise have benefited from Chinese trainings many even going to China on full state scholarships.

In many ways Uganda’s collaboration with China devolves a lot from it’s usual bilateral relationships with its traditional development partners because this is a story of Collaboration, Not Control. The Ugandan narrative goes beyond simply acting as a conduit for surplus Chinese capital. It’s a story of collaboration, with Uganda actively negotiating loan terms and prioritising projects that align with its own development goals. Uganda retains ownership and control over its infrastructure assets as well as its national economic/ political identity and outlook.

As Uganda and China’s partnership grows, focusing on transparency, environmental sustainability, and capacity building will be crucial. The evidence from past and ongoing projects suggests that China’s investments, when carefully managed, can be a powerful tool for accelerating Uganda’s development journey. We need to; beyond infrastructure and economic ties look towards a cultural synergy that can merge the Ugandan(African) spirit of community (Ubuntu) with the Chinese Confucian culture.

This reductive approach to China’s role in Africa fosters a more constructive dialogue, moving beyond the simplistic “debt trap” narrative and highlighting the potential for mutually beneficial partnerships that pave the way for a more prosperous future. For every false alarm ringing in Kampala, there should probably be a tenfold alarm in Beijing because if the bank has a problem when you owe it a billion, imagine how much more worried the Chinese should be who’s “debt-trap” is in the trillions.

Shemei Ndawula is a senior research fellow at the Development Watch Centre.

Framing Foreign Employees: Tales of Chinese Workers at Karuma Hydropower Project

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By Allawi Ssemanda

Figures from the Word Bank indicate that approximately, one billion people from Sub-Saharan Africa and South Asia have no access to electricity. This is a huge barrier to socio-economic transformation of world’s significant population and has both direct and indirect effects on development efforts like slowing expansion of development indicators such as health, poverty reduction programs, education, food security among others.

Despite significant progress in growing the numbers of people with access to electricity, it is still hard for developing countries to meet the 7th Sustainable Development Goal (SDG) of all having access to affordable, reliable, sustainable and modern energy by 2030.

The government of Uganda has been working hard to increase electricity production capacity to increase its accessibility countrywide. Through EXIM bank of China, Chinese government offered concessional loan to fund 85% cost of the project, while Uganda government is meeting the remaining 15%.  A Chinese firm SinoHydro Cooperation was contracted to undertake the project which is Uganda’s biggest hydropower plant and possibly, the 14th largest hydropower dam in the world.

The dam will produce 600MW which will push the country’s hydropower generation to 1,868 MW. The government hopes this will help the country to increase power accessibility countrywide reduce power tariffs in the long run.

Uganda’s vision 2040 which aims to make “a Transformed Ugandan Society from a Peasant to a Modern and Prosperous Country within 30 years” lists increased generation of affordable power as a magic bullet for the country’s socio-economic take off. To achieve this, Uganda must increase its electricity per capita consumption from the current 215 kWh to at least 3,668 kWh. This to happen, we must raise our power generation capacity to at least 41,738MW and increase access to national grid to at least 80%!

As Bent Flyvbjerg, a Danish professor at Harvard University taught us; “Infrastructure is the great space shrinker, and power, wealth and status increasingly belong to those who know how to shrink space,…” Put differently, Uganda to realise her 2040 vision, we must shrink electricity deficits. This will among others increase multiplier effects associated with increased access to power.

For this to happen, as a country, we must not aim at small and individualistic gains but rather aim at those that benefit us as a country.  We must not kill a hen to save an egg. This means resisting all acts that may delay or sabotage infrastructural developmental projects.  For instance, the completion of Karuma Hydropower project partly delayed because of sabotage when unknown individuals vandalised and collapsed 5 transmission towers on the Karuma-Kawanda 400KV transmission line.

Last year, I and a team of researchers from the Development Watch Centre went to Kiryandongo district specifically to get first-hand information and understand how the Karuma hydropower project was impacting the host communities.

We interviewd 91 people who included residents and leaders of Karuma town council and neighbouring sub countries, managers and emplyees of the project. These included 64 men and 27 women. Among the 27 women, some were those some media outlets identified as victims. While interviewing alleged victims, who media reported to have claimed to have children fathered by Chinese workers, one Lydia Atim (she gave consent to quote her) from Gulu refuted the claims stressing the father of her child was a Pakistan. “No, the father of my child is not a Chinese. He is a Pakistani,” Lydia Atim affirmed.

The findings reached at after several interviews revealed striking findings including ground truthed claims of blackmail by some local politicians who some community members and politicians argue are using the “victims” of the project for both political and monetary gains.

Asked why they cite Chinese employees as responsible including those who know that afthers of their children are not Chinese, Washington Ochaya, the area district councillor noted; “for us, all foreign workers in this area who are not black in colour are Chinese because they are the majority.” He stressed that as local leaders, in total they had “registred only five ladies who claimed to have had children with foreign workers.” If anaysed, in this case Chinese employees can easily be accused even when it is clear they are not personally responsible.

Desipte what he called a few challenges, Ochaya who was our contact person during the study credited the project stressing; “before this project, Karuma was a small town with no opportunities. With the project kicking off, the area has registered significant growth in all aspects that today, we have a Town Council and we are still growing.” “Land used to be cheap here, but with this project, land prices skyrocketed and social services in the area improved. Those Chinese also helped us to have access to clean water by constructing a water tap at Karuma primary school which is a source of clean water for entire community,” emphasised Ochaya.

While one may not conclude that accusing foreign workers of abandoning their alleged fathered children is a common conspiracy against Chinese, some local leaders think that some politicians are manipulating mothers who have children with project’s foreign employees to say it’s Chinese who are responsible. In our interview with Mr. Oryem Joseph Lilly, the chairperson LC 1 Karuma cell, he argued that some local politicians use local women with children fathered by foreign workers as a campaign tool so that they can be seen as having fought for what they present as vulnerable people. Oryem emphasises that some politicians are manipulating those women hopping they would get compensated and share their money claiming they helped them. Describing the act as corruption, Oryem stressed “corrupt politicians are using the project for selfish interests. They are so determined that some are willing to blackmail the project, inflate victims’ list and list of those who lost land hopping they can gain monetarily from this,” Oryem emphasised. Here, one can conclude that some politicians in the area are willing to kill a hen to save an egg!

In this case, a hen is framing and blackmailing huge infrastructural projects like Karuma hydropower project with its immense opportunities to local communities. The egg saved is someone individually benefiting as a result of blackmail or framing the project that would otherwise benefit entire society but the individual consciously or otherwise frames and blackmail it for personal gains which may in the long run affect the entire project and the host community who would otherwise benefit from such projects.

To avoid such blanket claims, government especially the ministry of energy should interest themselves in this matter and where a person or local politician claims of having knowledge of existence of so-called “many abandoned children” left behind by foreign workers, they should be tasked to help authorities locate alleged victims. Otherwise, other than the possibility of government or the contractor spending much money compensating such non-existent victims on long lists created for political and other ulterior motives, such unsubstantiated claims have potential to cause unnecessary projects delays.  Also, as a country, we risk being seen as hostile to our development partners because of selfish individuals who thrive on blackmail.

Allawi Ssemanda is a Senior Research Fellow at the Development Watch Centre.

 

Opportunity in Uganda’s Road Crisis? Lessons from China

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By Nnanda Kizito Sseruwagi

I was initially depressed when pondering this article. The crisis of Uganda’s roads depresses many of us. I don’t think it is necessary to explain or emphasize the wreckage of what used to be the roads and the dreams and potential we have lost economically and humanly with the loss of precious lives in avoidable accidents.  But I was later rescued from my depression with the realisation that something could be done. Something must be done.

So, I will focus more on the opportunities buried in the mess of Uganda’s dilapidated transport infrastructure.

In more developed countries, it is extremely hard to have accidents on highways and even in the city because of the width of the roads. Not only are their roads wide, but they are also two-way lanes, meaning they have only one lane taking vehicles in each direction. Therefore, cars can hardly collide or struggle in messy traffic caused by competition for space on single-track roads as we occasionally see in Uganda. Motorcycles are also given separate lanes which both reduces their traffic while mitigating accidents.

I had never reflected seriously about the state of our roads until I travelled to China. Let me first satiate you with the excellence of China’s road network.

Almost all roads in China are two-way laned, both for roads in the city suburbs and the expressways that stretch to China’s furthest villages. These roads are mostly flat. This is to say, any barrier to the flat flow of the road meets the insurmountable human will and engineering dare-devil attitude of Chinese road constructors. For every slope down one mountain to another or over a river or a lake, the Chinese will erect huge pillars of steel and concrete and suspend a bridge stretching the entire length that nature decided to go. In case the land along which the roads curve is flat, but is blocked by a small mountain, the Chinese will dig a tunnel to create a way through the stomach of the mountain. And since they have two-way lanes, these tunnels are always two. And are equally very wide and well-lit.

The engineering art required to think these roads into existence pales away in contrast to the courage it takes to look at a mountain and say; “you shall make a way for our people!”. The Biblical Moses laid a stick to split the water for Israelites to move, but the Chinese engineering Moseses suspend tons of concrete high above the water and make a way for their people. One construction feat accomplished in China recently was the Sanyuan Bridge in Beijing, where a 1,300-ton bridge was replaced in just 43 hours.

But to avoid this article sounding like a song of praise for China’s road infrastructure greatness, I will turn to the opportunities Uganda has in its failing road network.

Of course, my thoughts are generalized observations in a way because there are so many material factors which make China function in a different way from Uganda. But we still share a lot in common and have several factors in our favour supporting transformation.

One of the advantages China has over us is its land tenure system which is flexible for the government to implement road construction projects without the bloated compensation claims and long court battles involved with road construction projects in Uganda. I strongly believe that it will be very hard and expensive for Uganda to develop if we keep the system of private land ownership. But that’s a whole topic for another article/book.

Here are the opportunities. For each road we see in Uganda today, we need one more going in the opposite direction. We can and should adopt the policy of two-way lanes. I know it sounds expensive and hard but Uganda is a small country with abundant unexploited resources. We have enough concrete to build up this country excellently. This spells big business for road construction companies. And for our unemployed engineering graduates.

The government should incentivise students to study civil and architectural engineering if we are serious about industrialising this country. Costs in health, business/investment and trade sectors will be indirectly met if we succeed in having a well-built environment. For example, a lot of the cases of disease and accidents which eat up our national health budget are caused by poor living conditions due to bad housing, shoddy drainage and poor road networks. These can be curbed by developing a high-level engineering industry to build up this country.

The Chinese are so obsessed with roads. They have many well-paved and wide roads. I think every developing country should study this obsession. We should first and foremost plan and build our roads and then consider space for other buildings. That’s how we shall build an organised city. And it’s on those roads that our economy will run and take off.

The writer is a senior research fellow, Development Watch Centre.

nnandakizito@dwcug.org

 

Xi’s Third Belt & Road Forum Speech Re-affirms China’s Commitment to Building a Community of Shared Prosperity

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By Allawi Ssemanda

Last week, the world leaders gathered in Chinese capital Beijing as leaders from over 150 countries, and representatives of international organisations met in Beijing for the Third Belt and Road Forum for International Cooperation. The event also marked 10 years of the Belt and Road Initiative (BRI). Jointly implemented by participating partners, BRI which was initiated by China in 2013 is a high quality public good whose benefits are shared by the world. The project delivers high-standard, sustainable and livelihood-enhancing outcomes globally appreciated.

The project is highly commended for its contribution towards global infrastructure development which has greatly contributed to global connection and easing of trade and the movement of goods and services which has contributed to uplifting of 40 million people out of extreme poverty across BRI economies. This makes the initiative a textbook example of win-win cooperation and shared prosperity which China has always advocated for.

Stressing that the Belt and Road cooperation is based on the principles of “planning together, building together, and benefiting together,” President Xi explained that the BRI “transcends differences between civilizations, cultures, social systems, and stages of development,” adding that “it has opened up a new path for exchanges among countries, and established a new framework for international cooperation.”  “The BRI represents humanity’s joint pursuit of development for all,” observed President Xi.

With this, one can argue that President Xi was spot-on considering study reports about BRI conducted by different independent organisations including major think tanks and the World Bank (WB) whose conclusions contend that BRI is contributing to global development.

The other key area President Xi noted in his speech is the progress the BRI has achieved in green and low-carbon development and addressing climate change challenges. He revealed that this huge public good initiative does not only look at addressing today’s needs by improving connectivity through infrastructure development but it is also keen to addressing environmental concerns as a way of addressing climate change which is key for sustainable development as China continues her efforts of ensuring shared prosperity for mankind. “China has issued documents such as the Guidance on Promoting Green Belt and Road and the Guidelines on Jointly Promoting Green Development of the Belt and Road, and set itself the ambitious goal of forming a basic framework of green development through BRI cooperation by 2030,” Xi announced.  While critics of the BRI have always wrongfully claimed that the initiative is silent about environment, President Xi revealed; “China has also signed an MoU with the United Nations Environment Programme on building a green Belt and Road…, reached environmental cooperation agreements with more than 30 countries and international organizations, launched the Initiative for Belt and Road Partnership on Green Development together with 31 countries, formed the Belt and Road Initiative International Green Development Coalition with more than 150 partners from 40-plus countries, and established the Belt and Road Energy Partnership with 32 countries.”

Further, President Xi also talked about debt sustainability among BRI economies (countries that signed up for the BRI). He explained different ways China has put in place through consultations with partner countries as a way of managing debts so that the project supports wholesomely partner countries without causing economic stress. He stressed that basing “on the principle of equal participation and benefit and risk sharing, China and 28 countries approved the Guiding Principles on Financing the Development of the Belt and Road, encouraging the governments, financial institutions and enterprises of participating countries to attach importance to debt sustainability and improve their debt management capability.”

With aim of avoiding debt burden to BRI economies, China came up with debt sustainability framework for low-income countries. This framework which is endorsed by the World Bank and International Monetary Fund when extending funding and loan facilities looks at among others actual conditions of individual countries. Additionally, while implementing BRI projects, “China has prioritized economic and social benefits and provided loans for project construction based on local needs and conditions. The key areas of investment are infrastructure projects designed to increase connectivity, and projects for public wellbeing urgently needed in participating countries. These have brought effective investment, increased high-quality assets, and boosted development momentum,” Xi stressed.

It is not a surprise that several studies continue to credit BRI projects as catalysts for social-economic development of not just BRI economies but also countries that did not sign up for it but are in corridors of the BRI.  For example, a study by WB conducted in 191 countries, titled “How Much Will the Belt and Road Initiative Reduce Trade Costs?” concluded that the Belt and Road Initiative projects have made trade easier in BRI participating countries by “reducing shipment times and trade costs at country-sector level.”

Examining trade figures from 191 BRI economies and those in BRI corridors and 1,818 cities in BRI economies only, the study concluded that “for Belt and Road economies, the change in shipment times and trade costs will range between 1.7 and 3.2 percent and 1.5 and 2.8 percent, respectively.” Further, the study found that non BRI economies or countries that did not sign up for the BRI are equally benefiting from the initiative stressing that it has led to “reduction in shipment time ranging between 1.2 and 2.5%,” and reduced “trade costs of up to 2.2%.” Also observed by the study was that BRI economies and those countries where BRI projects go through or BRI corridors benefited the most with “shipment times along these corridors decline by up to 11.9% and trade gains by 10.2%,” noted the WB study.

Generally, there is a consensus that the BRI is a public good whose benefits are being enjoyed by a great percentage of mankind irrespective of our respective countries. For example, between 2013 and 2022, the cumulative value of imports and exports between China and BRI economies reached US $19.1 trillion which translates to 6.4% average annual growth, according to a white paper (WT), “The Belt and Road Initiative: A Key Pillar of the Global Community of Shared Future” released by China’s State Council Information Office this month. In this WT, figures indicate steady growth in two-way investments between BRI economies and China which reached USD $280 billion. As of 2022, the value of both imports and exports between BRI economies and China reached USD 2.9 trillion translating to 45.4% of China’s overall foreign trade which represents 6.2% increase if compared with 2013; while the overall value of imports and exports of Chinese private enterprises to BRI economies grew past USD 1.5 trillion which translates to 53.7% of trade between China and BRI economies for the said period.

From her successful experience, China understands the role infrastructure plays while pursuing sustainable development. As two Chinese adage contend; “要想富” , “先修路”; “Better roads lead to better life.” and “Build roads if you want to get rich,” it is clear that it is China’s thirst to contribute in building a community of shared future for mankind in the new era, that with hope of mutual benefits, Beijing embarked on funding this huge public good project  the Belt and Road Initiative to fasten efforts of achieving shared prosperity for mankind in the new era.

Allawi Ssemanda, PhD is Executive Director Sino-Uganda Research Centre and a Senior Research Fellow at the Development Watch Centre.

A Decade of Lighting Nations Through Energy Infrastructure Development: Recounting Fruits of the Belt and Road Initiative

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By Allawi Ssemanda

On average, an African woman spend up to 5 hours per day collecting firewood. A study funded by Finnish ministry of foreign affairs on Modern Cooking Facility for Africa (MCFA) contends this prevents women and young girls from engaging in productive economic activities, school and at times exposes them to physical violence. MCFA attributes this challenge to lack of access to affordable and clean cooking facilities which can largely be explained by lack of electricity on the continent especially in rural areas.

Relatedly, the Word Bank (WB) indicates that approximately, one billion people from Sub-Saharan Africa and South Asia have no access to electricity. This indicates a huge barrier to socio-economic transformation of world’s significant population portion and has both direct and indirect effects on development efforts like hindering or slowing expansion of development indicators such as health, poverty reduction programs, education, food security among others.

However, infrastructure financing including energy infrastructure is a very expansive venture which involves huge amounts of funds. A study by the WB titled “why we need to close the infrastructure gap in sub-Saharan Africa,” underscores this stressing that infrastructure funding gaps are bottlenecks to Africa’s economic take-off. The African Development Bank (ADB) also stresses the need to reduce the region’s infrastructure funding gaps for the continent to achieve its development goals putting needed budget to $130-$170 billion annually.

Despite this, international creditors and commercial loans meant to fund such projects in developing countries have significantly reduced over a period. Other funders especially from the Western world are largely interested in funding areas like administration and so-called democracy programmes, leaving out key sectors like energy and transport infrastructures which are key for social economic development to be achieved. For example, World Bank which used to spend 70% of its funding in infrastructure significantly reduced this to about 30%.

In Uganda, the government has been working hard to increase electricity production capacity as a sure way to increase its accessibility countrywide and China has been a reliable partner in this endeavour with Beijing funding the country’s two major hydropower projects under the Belt and Road Initiative (BRI). Also, under the same arrangement, China is funding Uganda’s rural electrification program.

Through EXIM bank of China, Chinese government offered concessional loan to fund 85% cost of the Karuma Hydropower project, while Uganda government is meeting the remaining 15%.  A Chinese firm SinoHydro Cooperation is undertaking the project which is Uganda’s biggest hydropower plant and possibly, the 14th largest hydropower dam in the world. Upon completion, the project which is now 99.45% complete will produce 600MW which will push the country’s hydropower generation to 1,868 MW. The government hopes this will help the country to increase power accessibility countrywide reduce power tariffs in the long run.

Currently, 200 megawatts have been connected to the national grid. Upon completion, it will add 44.6% to Uganda’s increased power supply effectively helping more Ugandans to get connected and lowering power tariffs and advance the country’s goal of industrialization drive.

Isimba hydropower dam is another project funded and constructed by Chinese government still under BRI arrangement.  The dam which started its commercial operation in 2019 was formally handed to the Uganda government on 31st March 2019. As of May 2023, it had produced about 3.98 billion KWH generating approximately 165 million USD revenue to Uganda government. Today, Isimba power tariffs is at 4.16 cents per kilowatt hour (KWH).

Also, Uganda’s Rural Electrification program which aims at increasing the country’s access to electricity to is 90% on course. The program which is funded by Chinese government as a concessional loan is being implemented by a Chinese firm TEBA has already connected over 170,000 Ugandans in rural areas to national grid.  It is also under the BRI arrangement.

From Chinese experience, we learn that infrastructure development is key for any country to achieve its development goals. As Asia Development Bank chief, Jin Liqun once noted; “The Chinese experience illustrates that infrastructure investment paves the way for broad-based economic social development, and poverty alleviation comes as a natural consequence of that.” There is no doubt that China gives us a perfect case of what investing in infrastructure can do for countries seeking socio-economic development.  The good news is that as Beijing pursues building a community of shared future, it has been willing to share and support willing countries by investing in their infrastructure development as a way of backing their economic take off. BRI has been vital in this journey.

Uganda’s vision 2040 statement which seeks to see “a Transformed Ugandan Society from a Peasant to a Modern and Prosperous Country within 30 years” lists increased generation of affordable power as a magic bullet for the country’s socio-economic take off. To achieve this, Uganda must increase its electricity per capita consumption from the current 215 kWh to at least 3,668 kWh. This to happen, we must raise our power generation capacity to at least 41,738MW and increase access to national grid to at least 80%.

Considering figures and reality in the country, it is arguably incorrect one to talk about Uganda’s electrification program without mentioning China’s contribution. Through concessional loans under the Belt and Road Initiative, China has supported Uganda’s energy infrastructure sector right from Isimba to Karuma hydropower project and to Uganda’s rural electrification program. Given importance of this sector, by all means, China’s contribution to Uganda’s socio and economic development cannot be underestimated. As we mark 10 years of Belt and Road Initiative, as a Ugandan and African, I cannot shy to say China-Africa relations have produced real results and the cooperation is a textbook example of win-win cooperation and a positive effort towards building a community of a shared future for mankind in the new era.

Allawi Ssemanda is a Senior Research Fellow at the Development Watch Centre

 

 

 

The Belt and Road Initiative Celebrates 10 Years: The Journey of China and Uganda Cooperation in Summary

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By Alan Collins Mpewo

Looking to the earlier years before 2023 looks nearer, like yesterday, and yet when the Belt and Road Initiative (BRI) was launched in 2013, making it thus far would seem unachievable. It is 10 years now that the initiative has endured. It has withstood all possible forms of hurdles along the way, especially from the foreign antagonism towards China. The outright goal of BRI remains connecting the world and easing trade and movement of goods and services. Akin to the silk route that connected the major parts of Euro-Asia, the BRI has done much in bringing various countries together, with a record connection of more than150 countries and over 30 international organizations have signed up for the project. It also covers a third of the world’s GDP and more than three-fourths of the countries in the world.

To date, BRI has worked on more than 3000 cooperation projects among BRI economies, which has resulted into easing of trade and movement of goods and services resulting into investments of close to one trillion USD which has helped in job creation among participating countries and also by extension helped in reducing poverty.

Infrastructure development with focus on roads, railways, ports, airports and energy infrastructure are some of major projects the BRI has supported over the past 10 years.

The infrastructural set-up in Africa by China speaks for itself. It’s from that point of line that Uganda, just like other few countries, can now be certain that the oil dream is yet to be achieved. Chinese capital has been a go by, and what is most interesting, is that China levels granting access to their manpower and technology. This has been done with Uganda following the principle of mutual benefits and respect. China understands the fact that you can’t have sustainable development without proper infrastructure. Indeed, Chinese people have two common saying that; “要想富” , “先修路” loosely translated; “Better roads lead to better life.” and “Build roads if you want to get rich.” I am convinced right understanding explains China’s historic success story and as a way of building a community of shared future for mankind in the new era, China is sharing their experience supporting willing partners through especially through the Belt and Road Initiative which has made infrastructure development a priority.

It should be understood that Uganda being one of the first African countries to establish relations with China, has benefited more than most of her counterparts. Though it is still work in progress, with Chinese hand, today, Uganda has descent road networks spread almost in all parts of the country from the North to south, East to West and Central. China’s financing to Uganda has not only been in the road infrastructure, but also other projects such as in energy and gas. Karuma and Isimba hydropower dams are part of the major successes under this initiative. For a country like Uganda that has seen a great shift in its economic priorities, industrialization has always been a major factor to consider. Because of this, electricity supply needed to be increased across all parts of the country. After the commissioning of the Isimba dams, Uganda’s electricity capacity has grown and it is expected the country will have more especially after commissioning the nearly complete Karuma dam.

Before the Kampala-Entebbe express way was completed, transportation to and from Entebbe which doubles as Uganda’s aerial entry point was filled with much time spent on road. This equally had an effect on those who would later choose to access further areas via Lake Victoria, accounting for the much time spent on road. The story has changed in great measures. The new express way was financed by China with the understanding that time spent would be less, in order to expedite transportation of services and goods to the Airport so that they would see their export to the international market. With completion of Entebbe expressway, the time spent on the road is now about 30 minutes down from about 2 hours during heavy traffic jam.

Industrialization is not known anymore for what it was in Uganda, many years ago. Uganda had for a long time felt comfortable dealing with foreign made products than its locally made. This obviously is accounted for by many factors such as less expertise, technological challenges, and finances, and yet, Uganda’s potential to produce raw materials is unquestionable. China’s belt and road initiative has greatly changed that status quo. Organization is now a virtue, and this is seen from the scattered industrial parks by Chinese investors. This was long overdue because there needed to be a formal set-up for the industries and their professionals to converge together and carry out business while enjoying benefits granted to them in a centralized environment.

It goes without saying therefore, that while all the above are often cited, that the oil dream is yet to become the greatest success story of the two countries. The Albertine region of Uganda will soon be the hub that supplies oil, joining other global players. It cannot be said enough, of what the proceeds of the oil exportation can do for Uganda. Education, medical access, industrialization, energy and gas, and much more, if the finances are well used. The bottom line is the reduction in the unemployment rate of Uganda. Uganda’s unemployment rate stands almost equal to the employment rate, which leaves questions as to what exact extent can it be tackled. Since the growth of Chinese projects, unemployment has greatly reduced and more success is yet to be realized with the coming up of more projects under the initiative.

Much can be said about the Belt and Road Initiative and its impact to Uganda but what stands out presently is the fact that it has withstood for 10 years while positively impacting not just Uganda but over 150 Countries. It is with sincerity that the key players keep the pace for more years to come, because there is more to gain, than losing.

Alan Collins Mpewo is a Senior Research Fellow, Development Watch Center

Kampala Pothole Exhibition points at the need to adopt Chinese development Strategy

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By Shemei Ndawula

In case you’ve not been paying attention, last week ushered into the Ugandan civic space a new era of online and remote protests. The satirically dubbed #KampalaPotholeExhibition; a brainchild of Ugandan cartoonist and Academic Dr Spire Ssentongo, had all the pomp and novelty of a cultural revolution with Ugandan social media enthusiasts tweeting, posting and sharing various pictures and posts about Kampala’s “endemic pothole problem”. These posts, bordering on the hilarious, concerning and shocking made the online protest viral with features even in some traditional media outlets and many of our mobile phones and computer screens were the frontlines of the protest awash with images of all natures of potholes.

Unlike the physical protests which have for long characterized the Ugandan civil agitation space with debatable results, this particular protest seems to have achieved early level success with the momentum it garnered culminating into a discussion in parliament and the President ordering the release of funds for the expeditious repair of potholes in the city.

One of the most pertinent things that stood out in the discourse is that very little foreign aid is funneled into the transport infrastructure development in Uganda. For the most part Uganda funds its own expansion, repair and upgrading of roads especially within the Kampala metropolitan area, a heavy yoke on the Ugandan taxpayer which bites even harder if you have to carry it on pothole riddled roads. Additionally, this also stunts the road construction sector because with lack of international sector benchmarks and quality controls, many roads are constructed in inefficient and unsustainable outdated ways by local engineers and the foreign engineering firms who aim to undercut their expenditure and remit higher profit margins.

This is why the Chinese development aid structure stands out as perhaps the only major infrastructure driven foreign assistance policy that focuses on building Uganda’s infrastructure portfolio to spur cross-sector development in the national economy. In the past two decades, Uganda has seen a significant increase in Chinese investment and associated diplomatic policy, with major projects including the construction of the Kampala-Entebbe Expressway, the Karuma Hydroelectric Power Station, and the Standard Gauge Railway and many other major infrastructure projects. These projects have been funded by Chinese loans and grants, and some have been actualized through Public-Private partnerships with Chinese companies which share their cutting age technology on the sites and provide the much needed employment for Ugandan workers through the local content parameters. Chinese engineers and other experts work closely with their Ugandan counterparts, sharing knowledge and expertise to help improve the quality of infrastructure projects in the country.

 

The diplomatic corp of the People’s Republic of China has also played a key role in the development of Uganda’s infrastructure sector with China being a major supporter of Uganda’s development agenda, and working closely with the Ugandan government to identify areas where Chinese aid and expertise can be most effective. This has included the development of a comprehensive infrastructure master plan, which outlines the key areas where investment is needed to support Uganda’s economic growth as well as linking the various economic hubs of the country with road and rail networks to kickstart this development.

An outstanding example of this would be the “Oil roads” in Western Uganda currently being constructed in the Albertine basin to facilitate the oil exploration activities that are already giving districts like Hoima facelifts and encouraging economic and social development within the region. This investment has helped to improve the quality of life for Ugandans, by providing better access to markets, healthcare, education and other multiplier effects.

Looking ahead, Uganda is well positioned to benefit from the Belt and Road project being rolled out across the African continent. This initiative, which aims to promote economic development and connectivity across Asia, Europe, and Africa, has the potential to transform Uganda’s infrastructure sector, by providing new opportunities for investment and collaboration with Chinese companies.

Chinese investment and diplomatic policy have played a critical role in the development of Uganda’s infrastructure sector, particularly in the construction of roads and other transportation infrastructure and if we are to follow its de-congestion strategy particularly by constructing more superhighways like the Entebbe Expressway and investing in alternative means of transport like the Chinese funded East African Standard Gauge Railway, the overall driving experience and road condition within Kampala will be greatly enhanced. While there is still much work to be done to address the challenges highlighted by the so-called #KampalaPotholeExhibition, the progress that has been made to date is a testament to the power of international cooperation and partnership in driving economic development and improving the lives of people around the world.

The Kampala Pothole exhibition has gone a long way to reveal the dire state of the road network within our capital and there’s a collective sigh of relief from the Citizens that expeditious action is being taken to rectify this. It is also a pat on the back for the Sino-Ugandan mutual development strategy that focuses on infrastructure development to spur economic development in the country.

 

Shemei Ndawula is a senior Research Fellow at the Development Watch Centre.

China-Uganda 60 years of Diplomatic Relations

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China and Uganda have a long diplomatic history dating back to the post-independence era. China is among the few countries that recognized Uganda as sovereign country just days after independence. Since then, Beijing has been cooperating well with Uganda, offering Kampala support in different sectors that we cannot discuss the journey of Uganda’s socio-economic development without mentioning the role of China.

In education sector, China continues to do a tremendous work offering training opportunities to different Ugandans at different levels. By end of 2021, Beijing had offered Ugandans hundreds of undergraduate and postgraduate scholarships and over 5000 Ugandans benefited from China’s short course training opportunities covering different key areas such as agriculture, medical care, infrastructure, information and technology among others.  China is also collaborating with African universities funding research and other learning opportunities. Makerere University’s Confucius institute is among the many examples. Aware that human capital and well-educated and skilled people are essential to facilitate development of the country, one cannot discuss development of Uganda’s education sector and human capital development without mentioning China’s contribution.

In the field of agriculture, China has been playing a key role for more than 40 years. In 1973 and 1987, China invested and established the Kibimba Rice Scheme (Now Tilda Uganda) and Doho Rice Schemes which have increased rice production and provided employment opportunities to many Ugandans. Additionally, the South to South Co-operation has boosted agriculture in Mbarara, Kabale, Amuria, Wakiso, and Budaka. Agricultural technology demonstration hubs have been established in Kabale to boost horticulture. China has also been supporting fish farming by funding the construction of the Wakawaka fish landing site and the Kajjansi Aquaculture Training and Development Centre which is a national center for aquaculture research in Uganda. This has led to increased and sustained fish production.

In 2009 under the South-South Cooperation (SSC), in coordination with United Nation’s Food and Agriculture Organization (FAO), China launched FAO-China South-South Cooperation (FAO-China SSC) and established FAO-China Trust Fund. China invested $30 million in this program to to support agriculture in Uganda. China has since been supporting this program injecting $100 million in 2015 and 2021 for phase II and phase III respectively.

During phase II of China-FAO SSC, China sent 47 agricultural experts and technicians have to train Ugandans in the same field. During the expert’s two year stay in Uganda, they trained many Ugandans and helped to improve technologies used to in farming of various crops such as rice, foxtail millet, maize, grapes, apples and cherry tomatoes, as well as animal reproduction.

In energy sector, China’s contribution in Uganda’s energy is also visible. The Karuma dam hydropower station with capacity of 600 MW which under construction in Kiryandongo District is an example of China’s contribution in Uganda’s energy sector. The project is 85% funded by China’s Exim Bank and Uganda government is meeting the remaining 15 percent. The project is being constructed by a Chinese firm Sinohydro Corporation and is expected to be completed in June 2023. Isimba power station which became operational in 2019 was also funded by with a loan from China’s Exim Bank. Karuma and Isimba hydropower plants are identified in Uganda’s Vision 2040 as key projects to Uganda’s economic development.

In infrastructure development, China directly funded US $ 350 million for the construction of the Kampala-Entebbe express highway, which is the first express highway in Uganda. The expressway is a 51km, four-lane, dual carriage toll road linking Kampala to Entebbe airport. The stated intention of the highway was to; reduce congestion and increase the commercial viability of the Greater Kampala Metropolitan area, improve mobility and reduce travel times and vehicle operating costs, and provide better access to local facilities for communities and jobs.

The expressway has helped to improve mobility and travel times to the airport. The US $ 350 million loan will be paid in 13 years and current statistics from Uganda National Roads Authority indicate Ugandans have embraced using the road with average daily passages of 20,000 which is far higher than projected daily passage which UNRA had put at 13,000 passages.  This also means daily collections have risen which is a good sign that the road can sustain itself in terms of maintenance and paying back construction loan. Indeed, Joy Nabasa the spokesperson of Egis which was hired to maintain the road collecting the toll on behalf of UNRA recently told journalists that the number of passages is increasing daily. Last month, media reports indicated that the road toll had collected 13 billion shillings in 4 months alone.

Good road network is key in transportation of goods and services which is key for development. As two Chinese say; “Better roads lead to better life.” and “Build roads if you want to get rich” with more good road network, Uganda’s social-economic growth and match to middle-income status is a matter of time.

In health sector, China continues to play a key role in supporting Uganda’s health sector. For example, as a result of good relations between the two countries, China funded the construction of China-Uganda Friendship hospital at Naguru. The hospital offers health services to people, for instance, paediatrics, gynaecology, dental, and laboratory services.

On 10th June this year, a team of Chinese medical personnel arrived in the country and will stay in Uganda providing medical services to citizens. Since 1983, China has been sending a team of doctors and experts to help work with Ugandans in extending medical serves to Ugandans.,

In the wake of COVID-19, China has supported Uganda in the fight against the pandemic. China donated COVID-19 test kits to boost efforts against the virus. Additionally, Beijing donated up to one million doses of COVID-19 vaccines.

Considering the positive contribution, the two countries have witnessed over the last 60 years, it is a living a testimony that China and Uganda are good comrades, good equal partners and good brothers always working hand shoulder to shoulder with major aim of building a community of shared future and prosperity for mankind. Considering enormous opportunities that comes with this brotherly relation should be natured by people of both countries. This to happen, as a Chinese saying goes, “amity between the people holds the key to state-to-state relations,” with the bilateral relations between our countries were elevated to the level of Comprehensive Cooperative Partnership three years ago in late June 2019, our two peoples must guard these relations jealously.

Vianney Sebayiga is a research fellow at Development Watch Centre and a Student at the Kenya School of Law.

 

 

China funded Nairobi Express 93% complete.

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One of Kenya’s biggest infrastructure project, Nairobi Express is set to be completion by march next year. The announcement was made by Kenya’s President Uhuru Kenyatta while inspecting the program to assess its progress where he defended Kenya’s relationship with China describing it as “mutual benefit.”

Presiding over the last girders of Kenya’s first toll road president Kenyatta announced that construction work is now 93% complete and praised contractors- China Road and Bridge Corporation for what he described as speedy work. Kenyatta added that once completed, “the road will reduce the gridlock that people have experienced and which added to the cost of doing business in the country.”

He also thanked China for supporting construction of the Nairobi Expressway, as well as other major infrastructure projects in Kenya and and the continent. “A lot of people have told us that our relationship with China is not beneficial. To them we say come, let them see a project like this. Let them see the project we have in Lamu; let them see the one we have to reduce the cost of petroleum in Kilindini and the various projects we have done to ease the life of Kenyans.”

President Kenyatta emphasised that Kenya’s relationship with China is mutually beneficial; “Our partnership with China is one that is mutually beneficial that is based on win-win and we are very grateful to the Chinese government, to the Chinese people for the support that they continue to render not only to our country but to the rest of Africa.”

China Road and Bridge Corporation is funding the highway, with the project’s contract value pegged at $668 million. On completion, the road will stretch 27km across Nairobi, and it is meant to ease traffic flows in and out of the city centre.

 

Seven Years of China’s Belt and Road Initiative: How are Developing Countries Benefiting?

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By Ssemanda Allawi.

In 2013 – seven years ago, Chinese president Xi Jinping gave a set of speeches where he announced the proposal of the now famous Belt Road Initiative (BRI). Xi delivered the first speech about BRI during his visit in Kazakhstan, elaborating his desire and vision of restoring the ancient silk road which offered routes from Peoples Republic of China, through Central Asia to the far Europe. In October, 2013 during his speech to Indonesian parliament, president Xi announced his maritime silk road concept to Indonesians to facilitate trade and ease movement of goods and services.

In the seven years of the project’s implementation, BRI has registered considerable achievements seeing over 29 International Organisations and over 71 countries sign or joining it. This means that more than a third of global GDP and more than two thirds of world’s population are part of the project!  This means that upon completion, the project will make the world’s largest market easy to access and traverse on both road and sea which are key in transportation and mobility of goods and services.

However, this is not without critics especially from some parts of western world with the U.S leading critics of the project with claims such as lack of transparency from Chinese authorities especially its financing while others branding the project is part of what they call China’s debt diplomacy.

However, research indicates that claims of lack of data on funding of the projects are largely wrong as a number of studies and research work  have given a clear view  of funding of this project.

Critics of China and BRI project in particular have often claimed the project is too expensive and will see developing countries fall in what they call China’s “debt diplomacy” with some western capitals branding the project Beijing’s debt trap. Many of critics have always cited Sri Lanka’s Hambantota which was leased to a Chinese firm for 99 years to help repay the country’s debts. The claims that Hambantota port was seized by China are also ambiguous considering the current state of the port if compared to how its state before the Chinese firm invested in it.

Washington has also been very critical of BRI project and generally China’s funding of infrastructure development in different parts of the world claiming that many of Beijing’s clients are  pariah states. 

However, some of these claims seem to be political with Washington screed of China’s growing relations with the rest of the world which they see as one way of antagonising U.S’ strategic interests. A case in point is citing Beijing’s growing relations with African state of Djibouti. In 2018, U.S’ top military commander in Africa, Marine General Thomas Waldhauser told U.S’ House Armed Services Committee that China’s state-owned China Merchants Port Holdings owning shares in Djibouti’s meant that U.S military could face “significant” consequences. Djibouti is one of many countries China considers part of its Belt Road Initiative.

In regard to Beijing’s infrastructure assistance going to undemocratic states, this is largely wrong. Most of Beijing’s borrowers are democracies with countries such as South Africa, Tanzania, Brazil, Kenya, and Tanzania. Other democratic countries that that have benefited from China’s infrastructure loans include United Kingdom (UK). China is a major investor in UK’s Hinkley Point Nuclear power plant in Somerset.

Therefore, despite critics of BRI, it can be argued that the project so far is a success. Indeed, in 2019, a study by World Bank entitled; “Belt and Road Economics: Opportunities and Risks of Transport Corridors” analysed transportation projects along the BRI routes and concluded that benefits to recipient countries and the entire world would benefit from the project. In Kenya for example, as a result of Belt Road Initiative project, the country built a 470 km railway line from Kenya’s capital, Nairobi to the coastal city of Mombasa which shortened travel time from 10 hours to five, created over 46,000 jobs and helped the country’s GDP by 1.5%.

Despite the study reporting more cases of policy impediments than infrastructure impediments – such as customs delays, bureaucracy, red tape, imports tariffs and corruption which increase trade costs, the study is a proof that BRI will play a significant role toward both social and economic development of the world.

From the above and findings of this study, it is evident that improving investment climate is a key complementary when it comes to supporting and investing in infrastructure sector. This can be realised through deep trade agreements such as the proposed Africa Continental Free Trade (AfCFTA). On Global scale, agreements such as BRI, AfCFTA and the recently reached trade liberalisation agreement between China and ASEAN, Australia, South Korea, New Zealand and Japan can help to eliminate tariffs which sometimes are barriers of trade.

Therefore, critics of infrastructure development should not look at infrastructural development in lenses of competition but rather putting in place facilities to aid trade. In particular, those criticising BRI branding the project a debt trap or debt diplomacy should reconsider their exaggerated claims. For example, countries that do borrow funds from China have also on many occasions borrowed from the so-called traditional donors or World Bank, IMF as well as other private bond holders. This means these countries diversify their sources of finances and thinking that they are beholden to China is ignoring key and glaring facts.

However, whereas it is very hard to present facts of the so-called debt diplomacy, there are genuine concerns when it comes to debt sustainability especially to African countries. However, these concerns should not only be tied to borrowing from China but rather all relevant lenders. This is because, unlike domestic debt, foreign debt has to be serviced using exports and this way, there are clear limits that point at how much borrowing developing or poor countries may take and continue to thrive.

In addition, the impact of Covid-19 pandemic on global economies feared to cause recession has should serve as a warning that many developing countries may find it hard to sustain their debts. Almost all countries that were projected to continue with a positive economic growth curve before covid-19 now are IMF analysis shows these countries projections were negatively impacted by covid-19 which has caused negative impact on countries exports and affected their GDP growth and hence, raising questions if these countries can sustain their debts. Indeed, many of China’s clients in Africa are in debt distress.

Early this year, China joined G20 in offering developing countries debt relief as a way of helping countries affected by Covid-19 pandemic recover. Among countries to benefit from this plan include 40 from sub-Saharan region. Despite this effort, debt moratorium alone may not be a magic bullet for Africa and other developing countries. Debt restructuring or write-downs. The challenge is that such arrangements often are done through the Paris Club of which China is not a member. However, if China wants to write-down debts on some African countries and developing countries in general, it can since it has done it before. 

On the other hand, the US announced a new development finance institution, also known as U.S. Development Finance Corporation (USDFC) to compete with China in offering infrastructure funding to development countries.  Though this is a positive development, this initiate alone will not bring swiping changes. Most of developing countries prefer to use Chinese funding when it comes to infrastructure funding. Though they may look generous, traditional funders and their multinational banks prefer to fund sectors such as administration, social services and the so-called democracy promotion instead of funding the much-needed infrastructure programs. For example, at first 70% of World Bank’s funding went to infrastructure but has been reducing to recently 30% despite huge funding gaps in infrastructure sectors in developing countries.

It is important to note that developing countries are still faced with shortage of funding especially in infrastructure projects which are key for development. A study by World Bank and McKinsey Global Institute found that funding for infrastructure projects such as transport and electricity is lacking, noting that to ensure a socially inclusive development by 2030, there is need to spend more than $3.3 trillions annually of which 60% of this must go to developing countries in Africa. African Development Bank (ADB) on the other hand estimates that to meet demands of their growing population, replace aging infrastructure, African countries must spend between $130-$170 billion annually on infrastructure. Also, a 2017 study by World Bank “Why We Ned to Close the Infrastructure Gap in Sub-Saharan Africa” suggested that if these countries reduce funding gaps for infrastructure, the region’s GDP per capital will grow by 1.7% and hence. All the above shows that any infrastructure assistance to developing countries should not be underestimated and hence, the view that BRI project is a positive initiate for developing countries world over.

In conclusion therefore, as studies have indicated, BRI project has more benefits if compared with challenges it may bring. Instead of critiquing the project largely to Geo and Global politics, China’s critics especially the U.S should back the project and where possible embrace and support new trade agreements such as AfCFTA to improve trade and investment climate in developing countries than only negatively criticising funders that fund developing countries projects. Also, the U.S may champion calls to reform the The Bretton Woods institutions and offer attractive alternative funding to developing countries, reduce their anti-China rhetoric and instead participate with China whenever there are efforts to offer debt relief.

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