Tag: Sino-Africa

Six Decades of China-Uganda Win-Win Partnership: What are the Benefits?

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China and Uganda share a rich historical background of diplomatic and economic relations. The two countries established diplomatic relations in 1962, just 9 days after Uganda gained her independence.  Bilateral relations between the two entered a new stage of development after the National Resistance Movement of Uganda came into power in 1986 with bilateral cooperation expanding and mutual high-level exchanges increasing. In both 1996 and 1997, Uganda backed China at the UN Human rights Commission. In 2000, Uganda also supported the bill put forward by China on the maintaining and observing of the anti-Ballistic Missile treaty in the UN.

The Forum for China- Africa Cooperation (FOCAC), to which Uganda is a member, was established in 2000 following a meeting between Africa ministers and Chinese government in Beijing. The forum set up a programme of cooperation between African countries and China in various areas such as investment, financial cooperation, natural resource and energy, debt relief among others. Most recently, Uganda signed a memorandum to join the Belt and Road Initiative. This is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in nearly 70 countries and international organisations.

As of today, many African countries have benefited from this FOCAC. The most recent development support to Uganda from FOCAC arrangement is the USD20 million grant from Chinese government to support Uganda’s social and livelihoods projects which was signed in April this year by Uganda’s finance minister Matia Kasaija and Chinese ambassador to Uganda H.E Zhang Lizhong.

With the expectation of considerable revenues in the future from the exploitation of the oil reserves in Uganda’s Albertine region, there has been a growing demand for the construction of public infrastructure in Uganda which requires substantial financing. To meet her infrastructural needs, Uganda needs to invest an estimate of USD$1.4 billion annually. Public infrastructure encompasses a wide range of facilities, utilities and installations that are essential for the effective functioning of an economy and society. However, Uganda, like other resource rich and cash poor nations, lacks the financial capacity to finance these projects from her domestic revenues.

To maximise tourism revenues and facilitate business travels, Uganda embarked on a dual project to expand Entebbe international airport’s capacity and improve connectivity between Kampala and the airport to keep up with the air traffic. Uganda, as a member of the Chinese Belt and road Initiative, has benefited from the Chinese fair and conducive infrastructural financing agreements to low developed countries. China, through EXIM Bank extended a loan of up to USD 670 million which has seen the completion of the Kampala-Entebbe express highway and the ongoing expansion of Entebbe international airport which is now nearing completion. The newly built 10,000-square-meter cargo center at the airport was commissioned last April, and construction of the new terminal building covering an area of 20,000 square meters is ready to go.

Tourism remains Uganda’s highest revenue generating avenue and biggest contributor to the country’s GDP. The successful completion of these infrastructural projects eases mobility and facilitates cross-border travels of tourists and transportation of commercial goods which in turn grows the country’s revenues and accelerates economic development.

Furthermore, the Sino-Uganda relationship has equally facilitated expansion of Uganda’s electricity supply in an effort to accelerate the country’s industrialisation. China has been involved in the construction of two large dams at Karuma and Isimba. The Isimba dam, backed by China’s Exim bank with a $428.5 million loan at only 2% interest was completed in March 2019. Exim bank further financed the construction of Karuma dam with $1.4 billion, again at 2% interest. Isimba’s 183 megawatts (MW) of capacity brings Uganda’s national total to 1,167 MW. It is further estimated that prices will fall from $0.08 per MW to $0.05. Karuma dam adds a tune of 600MW to Uganda’s power sector. The increased power supply fits within Ugandan government targets that by 2040, industrialisation should contribute 31% of the GDP and employing 26% of labour force and contributing 50% of exports as manufactured goods.

Notwithstanding China’s very low interest and long-term loans extended to Uganda to boost economic growth through infrastructural development, in terms of industrialisation and Foreign Direct Investment (FDI), China is a key player in Uganda’s economic development. In the 2018/19 financial year, Uganda Investment Authority performance report ranked China a top Foreign Direct Investor in 2018 with a total investment worth $607million comprising 45.1 percent of the total investment. During the same period in which China overwhelmingly outnumbered other foreign investors, 75.4% of the jobs created were attributed to foreign owned projects. China is also Uganda’s second largest trading partner with the total exports and imports between the two countries totalling to over $940 million annually.

In 2021, bilateral trade volume between China and Uganda amounted to US$1.07 billion, registering a 28.5% increase, against the shock waves of the Covid-19 pandemic. These trade and economic relations have significantly raised domestic revenues for Uganda.

Conclusively, the above is a summary illustration of the inexhaustible and immense contribution that China continues to have on economic development in Uganda. The contribution is across a broad spectrum of sectors such as infrastructure development, manufacturing and industrialisation, Agriculture and foreign direct investments among others. The inflow of investment projects and establishments have increased Uganda’s tax base and domestic revenues and subsequently created various jobs for the locals.

Ainomugisha Barry is a research Fellow with Development Watch Centre, and a Lawyer.

 

Sino-Uganda Relations: The Upside Story From a Liberal Perspective

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Overtime, it’s increasingly evident that International Relations can be used for more than preserving world peace through amicable settlement of disputes or stopping international conflicts, but to also foster economic development between global states. Various states are realizing socio-economic development amongst themselves as far as trade, infrastructure is concerned by capitalizing on the favorable relations held with each other.

China and Uganda can be singled out as an example of such states. The two countries have enjoyed good diplomatic relations for close to 60 years with the first diplomatic contact being made by China shortly after Uganda attained Independence in 1962. Since then, this relationship built on mutual respect and cooperation has produced positive developments, the crux of the author’s discussion today.

Generally, while studying the relationship between China and any African country today, one may find it difficult to ignore the effect of the Belt and Road Initiative (BRI) on such a relationship. The aforementioned project was initiated in 2013 to promote infrastructure development among growing nations using funds from China.

Uganda having pre-existent relations with China and having signed an MOU to join BRI, has been one of the beneficiaries of this initiative. A peek into the UNRA national roads project status report for May 2022 indicates that funding from China has been used to complete road projects like the Munyonyo spur, Kampala-Entebbe expressway among others. It also indicates several future projects to be undertaken by secured Chinese funding.

Furthermore, these bilateral relations have realized significant development in Uganda’s energy sector. For instance, the twin Hydro Power Plant projects on river Nile, namely Karuma and Isimba, generating a combined 800MW of electricity were funded and built by funding secured from the Chinese government in addition to local revenue. Electricity is a major factor of production and industrialization, two sectors that can propel developing countries into economic stability. Additionally Chinese companies have undertaken major investments to develop the mining sector in Uganda, an example being the planned establishment of a $200 million gold refinery in Busia district. Such projects and investments increase employment opportunities for Ugandans as well as sourcing revenue for the country in form of taxes.

The continued good relations between China and Uganda have seen the latter nation record developments in its health sector. The earliest notable Chinese health aid to Uganda was through the establishment of the Development Aid for Health from China to Uganda (DAHCU) in the 80’s where Chinese medical teams were sent to the African nation to assist in the country’s ailing health sector. The China-Uganda Friendship Hospital Naguru, a modern health facility built by the Chinese government as a gift to Uganda, is one of the new health projects realized as a result of the good long-standing relations between the two countries. Mahatma Gandhi once opined that health, and not pieces of gold and silver is the real wealth.

Industrialization is argued to be one of the most viable routes toward economic development and transformation and is believed to be the spur behind China’s rise to an economic powerhouse in the last 35 years. Perhaps, in light of that transformation, China’s spirit of good will towards Uganda’s development has driven it to taking center in what one would describe as the African nation’s modern industrial revolution. This is evidenced by the establishment of Industrial parks such as Kapeeka in Central Uganda as well as the Sino-Uganda Mbale Industrial Park in the Eastern region, both funded by Chinese investment groups. Such establishments not only encourage and promote a shift towards a goods production-based economy but also create employment for citizens. With more planned similar parks in Uganda, it is evident that Kampala stands to further benefit more from its good relations with China.

Over 65% of Ugandans, as per a 2017 study by the Uganda National Household Survey, are engaged in agriculture making it the major source of livelihood in Uganda. The relations between China and Uganda have seen the former nation invest to modernize and improve the agricultural sector in the latter to enhance the livelihood of the locals. The Kajjansi Aquaculture Research and Development Centre is a project funded and established with support from the Chinese government as a specialized research center for fish species and modern fish farming methods. Famous for its fresh water lakes, Uganda is a major fish exporter hence such projects improve the country’s export earnings. Additionally, the two countries have significantly promoted trade amongst each other as result of their relations. Although Uganda currently imports more than it exports to China, the significant increase in the volume of exports is a positive indicator of the continuous growth and expansion of the African nation’s economy.

Additionally, the gains of Uganda from relations with China can be noted in the education sector. Annually, China has been offering education opportunities to Ugandans offering higher education scholarships and exchange programs to Ugandan students and hence, boosting the country’s human capital. China has some of the world’s leading institutions in fields like health, engineering and technology hence such an arrangement ensures Uganda’s acquisition of highly trained nationals that can return and contribute to the socio-economic development.

The Sino-Uganda relations have also resulted into developments and transformation of Uganda’s Information Technology sector. In 2006, Uganda secured funding from Exim Bank of China for establishment of the country’s data transmission infrastructure. This included installation of optical fiber cables around the country. As a major techno- innovative country, China has sought to inspire and challenge Ugandan youth to become technological innovators through the Huawei ICT Global Competition. Given the immense role played by technology in development today, Uganda stands to benefit from such an initiative.

In conclusion, the relations between Uganda and China can be described as mostly beneficial to the former as far as socio-economic development is concerned. The existing developmental projects, in addition to future projects have the potential, if well managed to significantly transform and empower Uganda’s economy. Concerns over claims of the socalled national debt burden that may be incurred through loan facilities to develop the country do not necessarily water down the benefits Uganda stands to enjoy if such borrowed money is put to effective use. In sprit of win-win cooperation, terms included in contracts of Chinese loans represent principles of fairness and balances well rights and responsibilities of involved parties. China has on many occasions written off debts of several African countries and renegotiated some where the borrower genuinely fail to pay. Chinese president Xi Jinping, defines the relations between Africa and China as a ‘distinctive path of win-win cooperation’. It is such development partners, keen on upholding values of mutual respect and co-operation that Africa needs.

Marvin H Kalema is a research Fellow with Development Watch Centre, and a law student at University of Johannesburg, South Africa

Six Decades of China-Uganda Win-Win Partnership

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On the 28th of June 2022, the Ambassador of the People’s Republic of China to Uganda held a briefing on the 60th anniversary of the China-Uganda diplomatic relations with Ugandan media and Think Tanks at the Chinese Embassy. Aware from Ambassador’s address, there is no doubt Sino-Uganda diplomatic relations have greatly contributed to Uganda’s social and economic transformation.  Diplomatic relations between the two countries were established on the 18th of October 1962, exactly nine days after Uganda gained her Independence from the British Colonialists.

Ambassador Zhang Lizhong’s address to media and think tanks was really a re-assuring as he went through the nature of Uganda’s relations with China while emphasizing past collaborations, current partnerships, and the huge potential for future diplomacy and engagement between the two friendly countries. While his address painted a worrying situation about current confrontational nature of international politics, ambassador Zhang his address on a hopeful note with reference to the availability of space for cooperation and understanding around the world with China as an obvious proponent of a peaceful, respectful, and collaborative global politics. One can also argue that with Global development Initiative (GDI) and global Security Initiative (GSI), the current confrontational nature of international politics will be addressed amicably. The GDI and GSI were both proposed by president Xi Jinping who holds a vision of whole humanity, with the aim of providing international products to meet the aspirations of the times – that is to say; peace and development with hope of building a community for humanity with a shared future and common prosperity.

When we look at Uganda and China, the two share a similar past of suffering under the iron fist of imperialism, colonialism, political instability, and civil carnage. This plethora of shared experiences has played a huge role in forging the bond that keeps tightening between the two countries. It was only fitting that Ambassador Zhang characterized China and Uganda as “good comrades, good friends, good partners and good brothers.” He also encouraged the relationship between the two states with a Chinese saying; Amity between the people holds the key to state-to-state relations. The friendship Uganda holds with China does not stop at mere words and phrases, it has been actively put in practice with among others China working with Uganda in infrastructure development and good livelihood for Ugandan citizens.

By actions, China has shown how much they value their now 60 years partnership with Uganda. There is an Increase in the important aspect of cultural and people-people exchanges between the two countries. For example, Ugandans have benefited from China’s hundreds of degree scholarships and over 5,000 short-term training opportunities for Ugandan talent in agriculture, medical care, public administration, computer science and Infrastructure.

Bilateral relations between Uganda and China were elevated to the level of Comprehensive Cooperative Partnership in 2019, and since then there has been an increase in political mutual trust, pragmatic cooperation in many fields and the strengthening of coordination and collaboration efforts in international and regional affairs. Ambassador Zhang also declared the bilateral relationship between the countries “at their best in history,” and called upon all fields of Uganda and China to forge ahead to fulfill consensus of both their national leaders and work hand in hand to open a new chapter of “friendship, cooperation and brotherhood in the next six decades and more.” The cooperation and bilateral relationship between Uganda and China have so far yielded amazing results. In 2021, bilateral trade volume amounted to $1.07 billion which is an increase of 28.5% in spite of the hurdles caused by the Covid-19 pandemic. Also in 2021, the two countries signed new engineering contracts amounting to $1.43 billion.

Additionally, many infrastructure projects are on track with the re-construction of Entebbe Airport including the building of the 10,000-square-meter cargo center that was commissioned in April and the construction of the new terminal building covering an area of 20,000 square meters also ready to go.

In energy sector, the rural electrification undertaken by Chinese company TEBA is expected to be complete around December this year and over 170,000 rural residents projected to benefit from the national power grid. If critically analyzed, the completion of 3 critical oil roads in Hoima and Masindi which is expected in October this year will leave the area well connected in terms of transportation which will ease mobility of goods and services.

China’s direct investment in Uganda is growing at a steady pace and by 2020 the stock of the investment reached $710million. This direct investment is concentrated in the fields of manufacturing, agriculture, mining, and logistics. Prominent among these is Liao Shen Industrial Park with over $400million investment and China-Mbale industrial park is expected to create 15,000 jobs opportunities with time and has currently created more than 2000. It is expected to draw over $600million in investment.

Ambasador Zhang Lizhong also highlighted a vital topic of Global development Initiative (GDI) and global Security Initiative (GSI) which were both initiated by Chinese president Xi Jinping. who holds a vision of whole humanity, with the aim of providing international products to meet the aspirations of the times, basically, peace and development with China’s wisdom and provide platforms to address the global challenges in security and development. The main target of these initiatives is to build a community for humanity with a shared future in collaboration with the Belt Road Initiative, the 2030 agenda for sustainable development, the New Partnership for Africa’s Development and Agenda 2063 of the African Union.

The extent of China’s collaboration with Uganda for the past 60 years cannot be exhausted, there has been a lot of opportunities for collaboration and there’s still more room to expand this fruitful partnership. With Uganda now working to fight poverty among citizens through Parish Development Model, aware that last year China eradicated extreme poverty, arguably, prolong and nurturing this special relationship between Uganda and China is an asset to Uganda’s road of fighting poverty. This will be a reality with Uganda learning from China which has practically embraced mutual benefit cooperation with not only Uganda but the rest of Africa and entire global south.

Moshi Israel is a Research Fellow at DWC.

FOCAC’S 2022-24 Dakar Action Plan: Where Do the Women and Youths Lie?

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It is every country’s aspiration to secure a stable, developmental, and sustainable spot on the international political and socio-economic equilibrium. Often times, the pursuit of these aspirations are hindered by usually foreseeable circumstances most of which have an imperialistic identity. In the same pursuit, a few countries manage to evade the swarm of conflict, not spontaneously but they eventually overcome. The incidental factors that spark this sort of triumph can secure a moment for discussion at a later convenient period. This moment’s topical focus is as to what happens when these countries get to the top. Rise and immerse others? Or rise and lift others? China is a focal point of choice. To immerse, or to lift!

A unifying bloc (for China and Africa relations) was formed in Beijing, and is known the Forum on China-Africa Cooperation. Following the China-Africa Consultative Forum, when it was first formed in 2000, criticism rang from all corners. The formation of this cooperation had joined the few international diplomacy blocs. It was a potential threat (as thought at the time) to the Western domination. It issued alternative policy direction to a traditional modus operandi. Like a few other attempts that had sunk miserably, this new born was to stand the proverbial test of time. As of now, it’s now 21 years and counting. The initial number of flag-off members has within that time expanded and it’s promising to add, that there are prospective members along the way.

The tradition has been holding a ministerial conference after a period of 3 years. The recent such ministerial conference was held in November, 2021, in Senegal’s capital of Dakar. Much was discussed, more was agreed upon, but there’s something worthy to note out of that ministerial conference. The needs, aspirations, and the goals have since kept alternating compared to very first ministerial conference. These needs and objectives have been inspired by the changing times. Whereas the founding principles of this diplomacy remain intact, the mode of achieving these goals and cropping of new regional and international challenges haven’t been constant. Two of the most interesting highlights of the recent FOCAC ministerial conference were the concerns on “Youth and Women,” and the “Digital Economy.”

In numerous countries, perhaps world over, women were greatly discriminated at peak levels in the recent centuries. For most African countries, sadly, this still happens on great scales, at a time where someone would think that such vices and regrettable events are only but a tale. The youth, on the other hand, are hardly supported by their respective governments in their pursuit to make the world a better place. These two interest groups are often times victims of uneven distribution of resources. The impacts are realized in the deplorable standards of living, and uneven spreading of wealth. The Forum on China-Africa Cooperation for the past 6 years has been committed to realizing the United Nations 2030 Agenda for Sustainable Development, specifically agenda 5 on realizing ‘gender equality’ and agenda 10 on ‘reducing inequalities’.

The Dakar Action Plan adopted under the ‘Culture and People-to-people’ exchanges chapter in which China and Africa FOCAC members pledged to keep strengthening the already present cooperation and future exchanges in advancing equality in gender. On the top list was empowerment of women. The two sides resolved on tenable solutions to this being through women’s dialogues by supported by all responsible bodies in these member states, exchanges especially among the women startup and seasonal entrepreneurs. Seminars both locally and internationally have been supported by China such as the ‘Happy Campus Projects’ and the Child Health and Maternal Healthcare programs to which over 25,000 women participants from the FOCAC developing countries benefitted from trainings on modern healthcare methods.

China is a serving member to the United Nations Commission on the Status of Women whose agenda is well laid out as of the sustainable development goals (SDG’s). This identity is a statement that its ideals are buried in equitable development. That China is worthy of guiding, advisory, and responsive partner state. The country’s resolve in promotion of women’s rights and elevation of their social and economic status has been on for years and it’s not surprising that in 1995, it hosted the Fourth World Conference on Women. There’s more to learn from other FOCAC member states from this resilience and the greatest expectation is policy formulation and implementation by these states.

The youth (in all forms) are equally pivotal to future success in these states. The national and international statistical analysis has showed. Authoritatively for the Republic of Uganda, China’s diplomatic relations and exchange programs have slightly been effective at addressing the unemployment problem. The Belt and Road Initiative being the greatest driver. The scholarship programs by the Chinese government to Ugandan scholars have been thus fulfilling at equipping the beneficiaries with the modern skills and knowledge of new technologies. The Chinese founded industries in Uganda’s scattered industrial parks, revolutionary agricultural methods at Kapeeka, Oil mining activities by CNOOC in the Albertine region, infrastructural construction projects, to state the least. Just last week, CNOOC announced completion of 56 modern houses which will be given to Ugandans in Albertine region as part of their compensation for land where CNOOC carrying out oil exploration. Also, the company is offering employment opportunities to Ugandan youth.

The downside is that the question of the disabled women and youth (widely) is yet to be answered. In practice, the intervention projects basically addressing this special group are more through short-term aid, than they should be permanent at securing long-term effects such as financial stability. Perhaps, the policy formulators who are able to read this should heed to the call. The bright light is that the Dakar Action Plan recognized this inequity and that’s a positive outlook. Now, than ever in the FOCAC relations, the youth and women have gained more attention. This is good progress, but more efforts by member states are still required in addressing the challenges that still linger beneath. Hopefully, the exchanges among these countries will keep yielding more and more.

Alan Collins Mpewo is a Research Fellow, Development Watch Center

 

China’s philosophy of building a community with a shared future for mankind offers Uganda lessons and hope

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By Allawi Ssemanda

The last two years of the Covid-19 pandemic have taught us that no man can stand on his own and, that as a global community, weak or strong, the world is safe if we work together for the common good and prosperity for mankind.

From this experience, it is clear that the current global challenges, such as armed conflict, climate change, economic hardships and poverty, can be addressed if countries of the world work together to find solutions for such challenges.

Looking at African Union’s Agenda 2063 and China’s philosophy of building a community with a shared future for mankind, one can confidently argue that Africans should unite and speak with one voice with their Chinese counterparts who have showed readiness to work with African countries under a win-win cooperation arrangement.

The good news is that, through Forum on China-Africa Co-operation (FOCAC), the two sides already have an action plan in place for the period 2022-2024, drawn from FOCAC’s ministerial conference which was generated through consensus, evidence that China’s relationship with African countries is guided by mutual respect, and is a textbook example of a partnership of equals.

The action plan highlights nine areas that the cooperation will focus on: peace and security, digital innovation, people-to-people relations, and promotion of trade and investments in African countries. The others are supporting medical and health programs, poverty reduction, supporting agricultural programs, green development, and capacity building. All these areas are vital for sustained the socio-economic development of Uganda, and Africa in general.

While global cooperation is key for international development and cooperation, in a post-colonial era where the architecture of current global institutions favors former imperial and colonial states, mutually beneficial relations and unity of the people of the Global South is vital in efforts to realize a prosperous, democratic and harmonious society in Africa and China.

As a major developing country, China eradicated extreme poverty among its 1.4 billion people in record time, and successfully built a moderately prosperous society. The country has since embarked on a new, ambitious path of moving towards high-quality development, dubbed “common prosperity”.

While popularizing the common prosperity concept, also known as “modernization with Chinese characteristics”, China’s president, Xi Jinping, argued that common prosperity will help in building a great and modern socialist country.

The main goal of the common prosperity concept is to reduce growing socio-economic inequalities, and promote all-round development, in Chinese society. Put differently, common prosperity seeks to empower Chinese citizens by creating conditions for all to thrive in their chosen fields and make a meaningful contribution to the development of their motherland.

In his essay entitled “To Firmly Drive Common Prosperity”, President Xi observes that while China succeeded in ending extreme poverty, the country still has to address the challenge of unequal development between urban and rural areas as well as closing the gap in income distribution between the rich and the poor.  This challenge is not unique to China, but a major problem to all developing countries like Uganda, and must be addressed to ensure meaningful development and social cohesion.

All the above offers Uganda and Africa in general vivid examples that while designing programs meant to reduce poverty, like China is doing now, such programs should aim at promoting all-round development.

Actually, as Uganda rolls out the Parish Development Model program, China offers practical examples which we should emulate, and seek views on how to use intervention programs to bring about all-round development.

The good news is that China seems ready to support and share experience with African countries and the entire world in taking the positive steps they have taken so far. Indeed, late last year, president Xi put forward a number of major initiatives, including building a global community of health for all, a community of life for man and nature, and a global community of development with a shared future. To join China in building a community with a shared future for mankind, African countries should support such initiatives and learn from China’s experience in an effort to make our world a better place for mankind.

However, African countries should not just sit and wait to be spoon-fed; they must be pro-active and use the opportunity of China’s willingness to work with them as “equal partners”. Currently, despite FOCAC, there seems not to be a coordinated engagement with China, and African countries have no clear “China strategy.” Although China has released three comprehensive Africa policy papers since 2006, and Africa has many experts on China, including thousands that are highly educated, thanks to Chinese government scholarships, Africa has no single policy paper on China either under the African Union or FOCAC.

The author is Executive Director of Development Watch Centre; a foreign policy think tank.

 

 

Sino-Africa Relations and USA’s Compete Act: US Should Emulate China’s Principle of Mutual Respect.

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By Allawi Ssemanda and Alan Collins Mpewo.

Last week, the United States of America (US) House of Representatives passed an act introducing strong measures to counter what they described as China’s growing relations with African Countries. In the Act entitled “America Competes Act of 2022,” US law makers passed six sections all seeking to counter or undermine China-Africa relations. The subtitle of the Act is also telling: “America Creating Opportunities for Manufacturing, Pre-Eminence, in Technology, and Economic Strength (America Competes) Act of 2022.”  If implemented, this act will see US using Africa based Civil Society organisations, US Global Media Agencies, organisations like Young African Leaders Initiative, USAID, and Mandela Washington Fellowship among others to undermine China’s development cooperation with Africa while promoting US’ primarily to promote Washington’s “Strategic interests in Africa.”

All the above should make us pause some questions such as; where does America Competes Act of 2022 leave African countries’ ambitious infrastructure and other developmental projects?  Is this Act meant to promote African countries interests and independence or America’s? Isn’t this Act against principles of respecting sovereign states legitime interests?

If critically analysed, America Competes Act of 2022 has no interest in promoting Africa’s interests or goals. The Act’s main focus is to weaken China-Africa cooperation and promote US’ “strategic interests” on the continent. Put differently, the Act is meant to help Washington revive its dying hegemony in Africa. The unfortunate part with this is that, it is not the US to miss out but Africa.

For example, section 30271 of America Competes Act of 2022 shows that its main objective is not helping African countries but rather to know how China’s projects and cooperation with African countries is impacting “US’ strategic interests.” The Act directs US secretary of state to submit a report which will guide Congress to counter Sino-Africa cooperation.

Further, section 30276 recommended amendment of “the Electrify Africa Act of 2015 by expanding the statement of U.S policy to include advancing U.S foreign policy.” In other words, US’ house of Representatives wants US’ Electrify Africa Act of 2015 amended to include provisions that promote US’ foreign policy interests in Africa at the expense of African countries. Further, the same section talks of encouraging export of US energy resources that benefits US’ interests stating that the US is committed to “helping facilitate the export of U.S. energy resources, technology, and expertise to global markets in a way that benefits the energy security of U.S.”

While it is true that all countries world over act in their own interests, aware that relationship between China and African countries are guided by China’s philosophy of mutual respect and working for a shared future, one can confidently say US’ Competes Act of 2022 whose intent is undermining Sino-Africa relations in favor of Washington’s strategic interests will largely affect African countries whose partnership with China has been praised for addressing Africa’s challenges especially infrastructure sector.

For example, the action plan for the year 2022-2024 produced from November 2021 Forum on China-Africa Co-operation (FOCAC) ministerial conference held Senegal, China renewed her commitment to continue supporting African countries development efforts. Indeed, this Action Plan details how China and African countries will co-operate in the next three years with clear details of projects to be supported through a generated consensus which reflects China’s relationship with African countries – mutual respect and the partnership of equals unlike US’ America Competes Act of 2022 passed by American law makers with no single input of African countries.

 While FOCAC’s 2022-2024 action plan offered a package of $40 billion financial commitments of which $10 billion will be invested in specific sectors, namely; manufacturing industries, agriculture and digital economy which is a big step in empowering African countries and creating China-Africa Community with a shared future, section 30273 of US’ Competes Act requires US president to “establish an interagency Working Group, which shall include representatives of the Department of State, the Department of Defense, the Office of the Director of National Intelligence, and other agencies…on means to counter Chinese” digital cooperation with Africa. Today, it is an open secret that technology is way to go and China has been building this capacity in a number of African countries Uganda inclusive. Therefore, any country that seeks to derail African countries or divert them from this as US’ Competes Act of 2022 seeks to do is an enemy of the continent.

Also, while section 30272 of US’ Competes Act of 2022 “requires that the Secretary of State, in consultation with the Secretary of the Treasury and Secretary of Commerce, the Attorney General, the U.S. Trade Representative, the USAID Administrator, and the leadership of the U.S. International Development Finance Corporation submit to Congress a report setting forth a multi-year strategy for increasing,” through FOCAC’s 2022-2024 action plan, China has already earmarked $10 of her International Monterey Fund (IMF) drawing rights share to assist development in African countries. Also earmarked is $10 billion will go to supporting trade with aim of boosting African countries exports to China a development expected to increase volume of China’s imports from African countries to a whopping $300 billion while $10 billion has been set aside to facilitate credit lines to African financial institutions to be accessed by several African countries.

If critically analysed, the entire part 4 of Subtitle D of this act does not only seek to promote US’ interests but also seeks to broadly curtail African countries choice on which country to associate with. Put differently, US house of representative meet and passed a law that will covertly decide for African countries who their development partner(s) should be! Even if Washington sugarcoats their act with diplomatic words to make it look pro-Africa, the act is largely political, seeks to expand their geopolitical calculations and in light of principle of State Sovereignty of these African countries, it is against the values of sovereign states.

On contrary, China’s relations with Africa remain bold as they are founded on a principle of mutual respect, mutual benefits and not outright imperialism or ‘ally and master’ like the West’s. It’s arguably clear that China remains resolute to respect State Autonomy and Sovereignty of her African counterparts as the two sides and the U.S should learn from that development in rethinking its mode of presence in Africa.

This principle has been greatly yielding for both China and Africa in context of mutual benefits. Trade, infrastructure, energy, to state the least have a long list of achievements that have emerged from this foundational cornerstone in the few decades China has been actively present in Africa. In fact, new participants in this yielding phenomenon on the African continent have emerged by taking examples of their counterparts, key players involved in the diplomatic relations. But now with the passing of the Competes Act of 2022 by the U.S, a question stands out! How will African countries standout by the time the U.S achieves its intended goals? Africa deserves respect of its independence. Africa deserves relations of mutual respect with whoever its countries choose to engage on the global stage of diplomacy. I think it is high time the US dropped her stance against Sino-Africa relations and join China and Africa in creating a China-US-Africa Community with a shared future and benefits. Dominance is a thing of past!

Allawi Ssemanda and Alan Collins Mpewo are research fellows at Development Watch Centre, a foreign policy think

Critics of China’s Exim Bank – Entebbe Airport Agreement and “debt trap” talk lack facts.

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By Allawi Ssemanda

This week, Ugandans on social media have been discussing China’s infrastructure loan terms particularly default clauses and escrow accounts with some making wrong conclusions of how Uganda “surrendered” airport to China. Of course, the claims that Uganda negotiated a bad deal lack international lending facts and so are wrong.

I will start with debt clauses. Critics argue that some provisions in financing agreement between Exim Bank of China and Uganda put our airport and other government assets at risk of being sized by China should Uganda fail to pay. Some reason that this is because, the agreement gives Chinese side advantage over the borrower and therefore should be renegotiated.

This issue of default clause is not new and should not be the basis of criticising Uganda-Exim bank deal. It is important to note that infrastructure financing is an expansive venture which involves huge amounts of funds and hence, increased risks. Therefore, default clauses in official credit market are not new and in this particular case are not meant to leverage Chinese creditors but rather to simply safeguard creditor’s funds.

A March 2021 study by Peterson Institute for International Economics, Kiel Institute for the World Economy of Germany, Georgetown Law and AidData observed that default clauses are not only used by Chinese creditors but have also been adopted by some members of Organizations for Economic Co-operation and Development (OECD), one of major groups that extend development assistance in form of loans to developing countries.

In this debate, it is important to recall that infrastructure financing is a very expansive venture which involves huge amounts of funds and hence, increased risks. According to African Development Bank (ADB), African countries especially in Sub-Saharan Africa including Uganda, to reduce the region’s infrastructure funding gap and sustain its growing population, the region must spend $130-$170 billion annually. This is re-emphasized by World Bank’s study: “why we need to close the infrastructure gap in sub-Saharan Africa,” which underscores infrastructure funding gaps as a bottleneck to African countries’ growth.

Despite this dire need for infrastructure funding, international creditors and commercial loans meant to fund infrastructure projects in developing countries for decades has been declining. Also, the so-called traditional funders who may appear generous are not interested in Africa’s pressing needs like infrastructure financing but prefer to finance other sectors like administration and so-called democracy programmes.   Using World Bank as an example, at first 70% of its funding went to infrastructure and has been reducing to now 30%. Experts argues that the decline of western countries support to African countries infrastructure is because infrastructure financing requires significant capital input, involves high risks such as defaults and takes a long period to payback.

Despite urgently needed financing for infrastructure projects in African countries, these projects continue to attract little attention from traditional funders while very few commercial institutions are willing to take them in due to high risks involved.

But China is funding these seemingly risky projects. However, like any serious creditor, to ensure safety of their sovereign loans, Chinese creditors include commonly-accepted clauses like cross default and cross cancellation in their agreements. Key to note is that the text in these agreements is generally the same which is accepted by the market. Also, terms included in contracts offered by of Chinese creditors represent principles of fairness and balances well rights and responsibilities of involved parties. That said, China has on many occasions written off debts of several African countries and renegotiate some where the borrower finds genuinely fails to meet contract terms. Also, in Entebbe airport – Exim Bank contract for example, clause 15.5 of the contract offers solution in such scenario: “The parties hereto undertake to use their best efforts to resolve any dispute arising out of or in connection with this agreement through consultations in good faith and mutual understanding…” Therefore, the talk of Uganda surrendering airport to China are unfounded.

There has also been criticism that Uganda has no full rights for funds on escrow account Uganda Civil Aviation Authority (UCAA) agreed to open. As discussed earlier, financing infrastructure projects is an expansive venture and infrastructure loans take longer period to be paid back. Understandably, in this case, creditors try to ensure they minimise likely risks. However, escrow account is commonly acceptable practice since it helps to ensure safety of creditor’s capital. Also, setting up a revenue account based on the proceeds of the project helps both parties involved in the agreement since the practice is meant to provide additional funding for debt repayment. The borrower benefits since it relieves the pressure on the creditor or government’s budget. This practice is not only for China but other countries including OECD have it. The Peterson Institute for International Economics, Kiel Institute for the World Economy of Germany, Georgetown Law and AidData study revealed that 7% of OECD member countries have similar options which acts as their repayment security devices.

Put differently, such default clauses are not brought to leverage the debtor but rather to constrain them to fulfil their obligations and become a responsible “borrower” in this case paying your loan/debt which is the main essence of signing an agreement when one is taking loan.

China-Africa brotherhood has stood a test of time that no one should doubt the other. Arguably, inspirit of a shared future, shared prosperity and South-South cooperation heart, China has not been hesitant to take risks other lenders feared. Indeed, in the past two decades, Beijing has provided almost all African countries with concessional and bilateral loans as well as commercial funds giving these countries support needed to improve infrastructure sector, grow their economies, and create jobs through industrialisation among others.

While some claim that this is Beijing’s long-term to strategy to grow her influence over Africa, this is not the first time China is offering infrastructure and developmental assistance to African countries.

For a fact, China unequivocally supports sovereignty of developing countries that one insinuating that Beijing is interested in seizing national assets of a sovereign country is not just a joke but it is an insult to China. While under colonial bondage, many African countries received support from China thereby contributing to their struggles to snap the shackles of colonial minority humiliation. In 1960s while China’s per capita GDP was less than that of Sub-Saharan Africa, China supported and southern Africa’s infrastructure with $400 million which helped in construction of the famous Tanzania-Zambia Railway (TAZARA).

Lastly, those claiming Uganda surrendered the airport, their argument is simply pessimistic. Why would one think a country with functioning government like Uganda will default meeting her loan obligations?

 Also, critics of China’s development assistance to African countries claim that Chinese loans to African countries are not transparent due to confidentiality clauses. It is important to note that, globally, there is no standard public disclosure when it comes to bilateral official lending. This is a common practice with sovereign debtors and creditors. Indeed, 2021 March study by Peterson Institute for International Economics, Kiel Institute for the World Economy of Germany, Georgetown Law and AidData observed that “almost all OECD official creditors and non-OECD creditors have not publicly released their loan contracts.” Other official lenders that have confidential clauses include; African Development Bank, the OPEC Fund for International Development, The Arab Bank for Economic Development in Africa also known as (BADEA), the Kuwait Fund for Arab Economic Development among others.

From above, one can argue that Sino-Uganda and Sino-Africa relations in general has been tested and no side can work to injure the other’s interests! Therefore, critics of these engagements are arguably driven by West’s narrative who seem to be worried that empowered African countries will not stand their hegemonic interests and hence, framing of Sino Africa relations with claims of “debt trap.” With the current trend of giving attention to so-called China’s “debt trap” and so-called Chinese hidden interests in Africa, I am tempted to think as Africans, we are again falling in West’s old playbook – divide and rule.

China-Uganda relations: an all-round mutual benefits engagement.

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By Ngabo Octave.

Sino-Uganda relations date back as early as 1962 when Uganda attained her independence. These relations have grown since to considerably that today, China is Uganda’s top source of Foreign direct investments (FDI.) The two nations have signed multiple cooperation agreements, exchanging students, medical teams among others all meant to help Uganda build her human capital. It is therefore imperative to say that the two countries have excellent relations that are of mutual benefit.

In terms of economic relations, The Forum for China-Africa Cooperation (FOCAC) to which Uganda belongs was established in 2000 following a meeting between eighty African ministers and the Chinese leadership in Beijing. The forum established a program of cooperation between African countries and China in areas such as investment, financial cooperation, debt relief, and cancellation, agriculture cooperation, natural resources and energy, education, and multilateral cooperation. This cooperation has been of great developmental impact on Uganda’s economy. Many African countries Uganda inclusive have already enjoyed fruits of this cooperation.

In terms of trade between Uganda and china, the volume has grown and stands at US$558 million and China is Uganda’s largest trading patter. Uganda’s exports to China totaled up to US$39.61 million during 2020 according to the United Nations COMTRADE database on international trade. The major Ugandan exports to China are mainly agricultural products such as; oilseeds, grains, fruits, spices, coffee, tea, wood, and products of animal origin such as hides and skins. China provides duty-free, quota-free access to its market to least developed countries including Uganda, and this, therefore, has created an opportunity for Ugandan traders to export to China due to its large market and incentives provided. This has driven Ugandan exports high hence improving its balance of trade and balance of payment. China is also the second biggest importer to Uganda and in 2020, these imports were valued at US$1.35 billion. The main imports included mainly electric and electronic equipment, machinery, iron and steel, textiles, chemicals, and plastics. China is, therefore, a source of highly needed products in Uganda at relatively cheap prices and these products have helped drive up economic development and the importation business from China is a source of employment to many Ugandans as observed by various small-scale traders in many arcades and malls in Ugandan towns.

In terms of manufacturing, many Chinese firms have established several factories and helped the Ugandan government to establish industrial parks such as the Sino Uganda Mbale industrial park, Africa Shandong Industrial Park, and the China-Uganda Agricultural Cooperation Industrial Park. These industrial parks have helped drive up the level of industrialization in Uganda, hence diversifying Uganda’s economy. Chinese-owned factories include electronics factories that produce electronic products at cheap prices locally, factories that carry out value addition to agricultural produces hence creating a market for the local farmers, and factories that manufacture timber products. These factories have created employment opportunities for many Ugandans hence improving their livelihood. These factories have also led to a reduction in imports hence improving the balance of trade for Uganda.

China has emerged as a significant financier of infrastructure projects in Uganda. Most of this financing goes to the transport and the energy sectors and are financed through the China Exim bank. Examples of these Chinese-funded projects include US$1.4 billion Karuma dam, US$483 million Isimba hydropower dam and the US$350 million construction of the Kampala-Entebbe express highway. These projects are expected to speed up industrialization in Uganda due to the availability of cheap electric power and improved transport means. These projects have also created jobs for many Ugandans because 85% of the manpower on the projects are Ugandans. In addition to these projects, many Chinese construction companies are undertaking various infrastructural projects in Uganda; a case in point is the Pearl Engineering Company Ltd. The China National Offshore Oil Corporation (CNOOC) is overseeing the construction of a pipeline from oilfields in Uganda to Tanga port in Tanzania and this will help to speed up the development of the oil sector in Uganda.

The ICT sector is another sector that has greatly benefitted from Sino-Uganda relations. Two Chinese companies have invested in Uganda’s ICT sector, one of them being Huawei. With the support of the Chinese government, these companies are working with telecommunication companies in Uganda to strengthen the country’s ICT sector. In the media sector, Star times have got a hold of a reasonable share of the Ugandan market. It provides solutions to digital migration.

China has supported the education sector in Uganda by providing scholarship opportunities to Ugandan students in institutions of higher learning. These scholarships have enabled knowledge sharing and cultural ties between the two countries. The Chinese embassy has also donated various materials such as computers and other scholastic materials to Ugandan schools. In addition to this, the Chinese language has been approved as one of the foreign languages in Ugandan secondary schools to be taught and this, together with the setting up of the Confucius Institute at Makerere University has created cultural ties between the two nations. Thousands of people including women, members of parliament, police officers have participated in training programs organized by the Chinese government in China and Chinese troupes have also visited Uganda and performed. This is a form of people-to-people and cultural exchange.

In the health sector, the Chinese government has funded the construction and equipping of the China-Uganda Friendship Hospital at Naguru. Teams of Chinese doctors have also visited the country and trained Ugandan medical personnel.

The agriculture sector has greatly benefitted from this Sino-Uganda relationship through the training of farmers, a project of the South-South cooperation program, which China and FAO have been collaborating with Uganda. This has equipped local farmers with skills to improve their agricultural output. Around 3000 farmers have been trained and seven agriculture technology demonstration hubs have been established throughout the country, showcasing effective technologies in horticulture, livestock, cereals, aquaculture, renewable energy, agro machinery, value addition, and sustainable business models.

In conclusion, China has been a great development partner to Uganda in various sectors and through the provision of financial aid in form of loans, grants, and technical assistance. China tops the list of planned FDI in Uganda and was valued at US$607 million in 2019 and created about 62,876 jobs. The Sino-Uganda relationship has therefore been paramount in Uganda’s economic development and will continue to play a critical role in this development.

Ngabo Octave is a junior research research at Development Watch Centre, a Foreign Policy Think Tank, and a second year Pharmacy student at Mbarara University of Science and Technology.

A Special Friendship: Six decades of Sino-Uganda shared Prosperity.

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By Shemei Ndawula.

When the sun sets on the gentle hill of Naguru, the building is crowned with the golden hue of the sun’s rays reflecting off its glass windows showered in a golden kaleidoscope ambiance. This is the image of the China-Uganda Friendship Hospital, Naguru which; as it is aptly named, an everlasting monument of the special friendship the nation shares with the People’s Republic of China. This friendship dates back to 8th October 1962 when the Chinese Republic sent a congratulatory message to the excited citizenry of Uganda on the eve of the night, they would shake off the embarrassing shackles of colonialism. This friendship was cemented on 18th October of the same year when representatives from Uganda and China released a joint communique establishing official diplomatic relations and China became one of the first world powers to establish a mission in Kampala and recognize Uganda as an independent sovereign nation. This is what set the precedence for the glorious brotherhood the two nations have had for close to six decades.

Globally, the People’s Republic of China is an unprecedented success story having developed from a third world country to a word economic superpower. This makes the Chinese module for domestic development a yardstick for African governments especially Uganda. Uganda is especially blessed to not only be able to learn from the PRC but also get developmental aid from China though various Sino-Uganda projects implemented through the years. Arguably one of the main spurs for China’s high-speed development is it’s increased infrastructural capacity. A nation’s economy is as strong as it’s capacity to produce and over the years China has upheld it’s commitment to help Uganda develop by contributing to Ugandan’s infrastructural development. The deputy premier of China, Wang Yang, was in Uganda in June 2018 to officiate at the commissioning of the 51-kilometer expressway from Kampala to Entebbe Airport commonly referred to as the Entebbe Expressway. This road was the crown jewel of a growing list of world-class roads being built by Chinese Communications Construction Company in Uganda. This road with dual carriageways and toll stations has drastically reduced the transit time from Kampala city to Entebbe airport which has enabled exporters of many perishables like vegetables and meat products to transport their goods faster and more conveniently increasing their market life and the prices they fetch on the international market. Interestingly many of these goods are actually exported to China which has a worldwide repute as an insatiable consumer of local delicacies like fish and vegetables. In the same vein Chinese companies are at the forefront of constructing and expanding the road network in the oil laden areas of Hoima and Western Uganda and which gives Uganda a chance to proceed with it’s oil exploration conquests in hope of diversifying the economy.

But in the perspective of the average Ugandan, the defining future of the Sino-Uganda relationship which makes it particularly special is the Chinese government’s renown principal of non-intervention. Coming from a painful colonial past, Ugandans are quite understandably suspicious of foreigners who come in the guise of friendship and end up trying to influence domestic and foreign policy, abusing the good spirit of African traditional hospitality. This is why the People’s Republic of China comes as a breath of fresh air, a break away from the neocolonial impertinence that is associated with most modern foreign aid. Chinese direct finance into the Ugandan economy grew from around $33 million a year in the early 2000s, to grossing about $197 million by 2017 according to statistics from AidData. This helps spur the national economic development especially since Chinese investment is mostly focused on manufacturing and mineral exploration. An outstanding example of this is the Chinese company in Central Uganda which produces and assembles Ugandan’s first domestically assembled smartphones under the brand SIMI. This provides jobs to so many Ugandans along the assembly and marketing lines and also provides affordable, durable and efficient smartphones made particularly for the African environment.

The Sino-Ugandan relationship that was initiated back on 8th October 1962 has stood the test of time outliving so many heads of state and persisting through turbulent times in both nation’s histories. Uganda was a very outspoken ally of China back in 1971 advocating for China to be reinstated in it’s rightful place as a member of the United Nations. Similarly, the Chinese government has stood fully behind the people of Uganda in times of crisis and most notably during the recent coronavirus pandemic where the Chinese government donated food items and medical equipment to be used in mitigating the spread and impact of the pandemic. Most recently the People’s Republic of China was the very first nation to donate Coronavirus Vaccines to Uganda which benefitted quite a number of Ugandan’s of Chinese origin as well as members of the general public.

Arguably, very few of the dignitaries who received the congratulatory message from Beijing may still be alive today, however, the spirit of unwavering friendship and mutual respect which was established on that day persists to date, a special friendship reflected every evening in the golden sun rays embracing the China-Uganda Friendship Hospital building in Naguru, an image of a Panda and Crested Crane walking hand in hand into the horizon of a future if shared prosperity.

The writer is a research fellow at Development Watch Centre, a Ugandan-based foreign policy think tank

 

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