Month: July 2023

From Social to Economic Support, China is Uganda’s Reliable Development Partner

Posted on By Sino Uganda Research Centre

By Akanyijuka Clevern

Just 9 days after Uganda gained her independence from Britain, China and Uganda formalized diplomatic relations. This perhaps makes China one of the first countries to have formally straightened diplomatic relations with Uganda. Since then, China-Uganda diplomatic relations have grown from strength to strength and in 2019, the two sides elevated their bilateral relations to Comprehensive Cooperative Partnership!

Guided by principles of sincerity, real results, win-win cooperation, amity and good faith, and pursuing the greater good and shared interests, the bilateral relations between the two countries continue to produce tangible results. In terms of social and economic development, in all measures, one can conclude that while the two sides stand to win from the cordial relations, Uganda is reaping big, thanks to Sino-Uganda relations.

The relationship between China and Uganda are primarily focused on economic cooperation aimed at promoting mutual prosperity. The Ugandan government has created an enabling environment for foreign investors, and Chinese investors are taking advantage of this opportunity to invest in sectors like industry, energy, mining, telecommunications among others.

Indeed, over the last several years, we continue to witness growing trade volume between Uganda and China that in 2022 the time when global trade faced covid-19 pandemic challenges, trade volume between Uganda and China rose by 6.6% standing at 1.13 billion U.S dollars. Recently, Chinese Ambassador to Uganda His Excellency Zhang Lizhong told Ugandan journalists and think tanks that in the first quarter of 2023, bilateral trade volumes between China and Uganda grew by over 28.8% which accounts to 293 million U.S dollars.

Interesting to note is that the importation of manufactured goods like shoes and clothes from China to Uganda continue to decrease while industrial parts, production equipment and machinery being exported to Uganda are on rise according to ambassador Zhang. If critically analyzed, this points to a remarkable progress of Uganda’s industrialization process thanks to government’s favorable conditions and many investments from Chinese investors in that field.

The two sides have made very positive progress in investment projects especially in fields such as infrastructure especially in transportation sector, electricity generation and transmission, oil development and refinery as well as industrialization through introduction of many industrial parks in the country.

Looking at official statistics from both Chinese Embassy and Uganda investment authority, it is evident that Chinese investors remain enthusiastic in investing in our motherland, Uganda. indeed, in 2022, Chinese investments in Uganda reached 131 million U.S dollars making Uganda the 10th country on the continent with the highest number of Chinese investments. This year alone, Chinese investors engaged in food processing, mobile home appliances, and textile entered Liao Shen industrial park and China-Uganda Mbale industrial parks injecting over 85 million dollars in our economy and creating over 2200 jobs for community members. Looking at multiplier effect of such investments, one can safely conclude that Chinese investments in Uganda are positively contributing to building of Uganda’s social and economic development.

In health and agriculture sector, there is no doubt when Beijing argues that China adheres to principles of real results, sincerity, amity and good health when it comes to supporting Uganda’s social-economic development. For example, this year marks the 40th year since China sent her medical team to Uganda. Today, cooperation between the two countries has seen tremendous growth with China sending over 209 medical experts to Uganda, helping in construction of China-Uganda Friendship hospital also known as Naguru Hospital. Currently, talks between Chinese embassy and Uganda’s health ministry are ongoing to upgrade Naguru hospital into a national trauma center.

In sectors such as agriculture and fishing sectors, China’s contribution is visible. For example, the Aquaculture Research and Development Centre Kajjansi also known as China-Uganda Friendship Agricultural Technological Demonstration Centre is one of many vivid examples in China’s role as far as growing and improving Uganda’s aquaculture. In agriculture, through South-South Cooperation Assistance Fund and working with Food and Agriculture Organization (FAO), in 2009 China introduced FAO-China South-South Cooperation (SSC) and has since then been funding agriculture sector in Uganda with over 3.55 million dollars. Today, the project is in its third phase and China has earmarked 2.39 million dollars to further support the sector with aim of benefiting at least 9600 local framers including at least 3000 women. Under phase III, at least 200 Ugandans will be trained and equipped with technical skills to further advance agriculture sector. If analysed, with government’s parish development model, China’s support to Uganda’s agriculture sector has potential to move Uganda to middle income status.

Looking ahead, prospects for even deeper cooperation between China and Uganda seem promising considering Beijing recently declared an intent to increase economic ties with Africa while continuing to move away from “resource extraction” strategies towards more sustainable investment models such as technology transfer and capacity building. Therefore, one is right to conclude that China has played a critical role in Uganda’s social-economic development through its investments, aid, knowledge transfer and capacity building initiatives. While there may be other concerns often fronted by Sino-Africa critics especially in areas such as development assistance extended to African countries, relationship between Beijing and Kampala, remains one of mutual benefit-based principles of sincerity, real results, win-win cooperation, amity and good faith, and pursuing the greater good and shared interests all aiming at building a community of shared future and prosperity in the new era.

Akanyijuka Clevern is a junior Research Fellow at Sino-Uganda Research Centre and a law student.

China-Uganda’s Win-Win Cooperation is Bearing Fruits

Posted on By Sino Uganda Research Centre

By Akech Sarah Elias

In international relations and foreign policy, diplomacy is considered to be a major catalyst for good relations of countries and a step-in introduction and implementation of social-economic development projects of a country. Like in human beings, good cooperation and relations among countries which is always characterized by effective diplomacy, international relations and foreign policy aid in promoting development of countries; because, in most cases, it is diplomacy that influence countries where to invest or which country to cooperate with. In that process, a country with good relations with neighbors and beyond is most likely to attract investments and developmental cooperation from such countries as opposed to those without or with shaky relations. Also, diplomacy and good relations of countries especially among neighbors and arguably beyond are key when it comes to promotion of stability which is very key in economic development.

Talking about foreign policy and diplomacy, whereas it is true that foreign policy is a guiding framework for national interests, and that it facilitates countries in determining their goals, values and national interests which results into formation of alliances and treaties, formed alliances and treaties at times are meant to strengthen one country against the other or indirectly promote hegemony. This explains why some countries especially from the west often impose conditions for their relations with other countries acting as superior other than equal partners as United Nations charter dictates that all independent countries are equal!

However, when it comes to China-Uganda relations and broadly, China-Africa cooperation, the two sides cooperation are a text book example of partnership of equals and win-win cooperation. For several decades, China has always based its relations with African countries guided by principles of sincerity, real results, win-win cooperation, amity and good faith while dealing with African countries! It is these principles today, that guide Sino-Uganda relations and in many ways, both sides are benefiting from this this brotherly cooperation.

In economic engagement, China’s engagement with Uganda has been characterized by substantial investments and collaborative projects. A 2021 report by the UN Conference on Trade and Development revealed that China had become one of Uganda’s largest trading partners and a major source of foreign direct investment.

Further, a 2019 report by the famous Brookings Institution, observed that China has also been actively involved in infrastructural development in Uganda with the main focus on transportation oil and energy and the report argued that such investments are key for Uganda’s social-economic development explaining that China is doubling down investments in Uganda and generally African countries key sectors at a time when fewer funders are willing to support infrastructure projects. One prominent example is the Kampala-Entebbe Express highway which was constructed with the help of Chinese funding. This project has enhanced connectivity, reduced transportation costs, and boosted trade within the country registering thousands of users daily.

China’s economic engagement with Uganda has been boosted by bilateral trade and investment agreements and treaties. A case in point follows the signing of the Free Trade Agreement in 2018 by the two nations which have fostered trade expansion. With China granting up to 98% of Uganda’s taxable items zero-tariff into their market, one can safely argue that trade between the two countries will grow further with Uganda’s agriculture sector benefiting more.

Still on economic benefit of a flourishing Sino-Uganda relations, the May 2021 China-Uganda Authorized Economic Operator (AEO) which came into force on 1st June 2023 will see the two friendly countries enjoy preferential policies in terms of document review and goods inspection. This will definitely facilitate the customs clearances of goods between the two countries thereby facilitating trade and by extension easing the work of Uganda Revenue Authority.

With AEO, Uganda will benefit from this arrangement in terms of streamlining trade finance and revenue collection which is aligned to China’s Revenue collection practices and enhancement of trade framework. If critically analyzed, the main informing aspect for Uganda to enter this mutual arrangement was on a basis of China’s stand on the global floor of trade. The arrangement was also meant to further the corporation between Uganda and China on the basis of the Forum on China-Africa Cooperation (FOCAC). This way, Preferential treatment will be accorded to the goods coming from China to Uganda and vice versa thereby strengthening trade between the two countries.

As a result of the good relations between the two countries and enabling environment, as of 2022, China’s direct investments in Uganda reached 131 billion US dollars. And, since the start of this year, Chinese enterprises in different fields such as food processing, mobile home appliances and textile industries have entered into Liao Shen Industrial Park and China-Uganda Mbale industrial parks injecting over 84 million USD in Uganda’s economy. Also, over 2200 jobs for locals have been created as a result of the said investments.

In conclusion, as a result of China-Uganda relations, the benefits coming from the said relations have been key in Uganda’s economic development process and hence. Therefore, despite some challenges and criticism especially from Sino-Africa skepticists, China’s significant role towards Uganda’s economic development cannot be ignored and the two sides as the two countries embark on building a community of shared future and prosperity in the new era.

Akech Sarah Elias is a junior researcher at Sino-Uganda Research Centre and a law student.

 

 

Climate Change: Opportunity in Crisis

Posted on By Sino Uganda Research Centre

By Moshi Israel

For many of us, there is an involuntary aversion to the very idea of having the words ‘crisis’ and ‘opportunity’ in the same sentence. It is hard to fathom how someone can see opportunities within crises.  It is no wonder that the phrase ‘never let a good crisis go to waste,’ has many negative connotations to many people. The same goes for the term ‘Reset’ in relation to several sensitive topics. The idea of an ‘economic reset’, a ‘political reset’, or even a ‘social structure reset’ will have many people up in arms and weaving conspiracy webs so entangled that the truth is often lost in the maze. This is partly because the world is increasingly divided along class lines of haves and have-nots, elites and regulars, rich and poor. This division has created a crowded corridor of ideas moving in different often opposite directions, all looking for the exit. The result is a costly stalemate where nothing is accomplished and no one goes anywhere.

This brings me to my key argument in this opinion. Climate change is a crisis that also presents us with opportunity. The climate change crisis presents us with the opportunity to reset our interaction with the environment by seriously reviewing our current systems and frameworks by altering them and bringing them up to date to eventually create a truly green and healthy planet for ourselves and future generations.

Planet Earth has a long history that scientists have divided into epochs, eons, eras, and ages. My focus here is the epoch timelines. Epochs can last millions of years and are defined by significant changes in rock layers such as mineral composition and the appearance of distinctive fossils. Each variation indicates a major climate change. This planet is about 4.5 billion years old and modern human beings are said to have existed on it for a mere 200, 000 years.

However, many climate scientists indicate that our relatively short existence has had a significant impact on global warming. Earth is believed to have been in the Holocene epoch for the last 11, 500 years which began when the glaciers that covered the earth disappeared at the end of the last ice age. In this epoch, our planet witnessed rapid population growth of humans, and modern civilizations sprung up. We built cities and introduced new technologies to a planet that had a relatively warm and stable climate.

Currently, science seems to show that we have entered the Anthropocene epoch. This is a time when scientists believe that human activity rather than any natural process, is primarily responsible for accelerated global warming. Activities such as Agriculture, deforestation, pollution, and urbanization have caused drastic changes on our planet. The proof for the Anthropocene epoch is still up for debate as scientists search for a ‘golden spike’, a kind of marker in the fossil record which could distinguish the Holocene from the Anthropocene. The marker has to be so remarkable as to be discernible in rock layers thousands or millions of years into the future. Be as it may, others have argued that the Anthropocene phase could have been ushered in by Britain’s industrial revolution and its fossil fuel dependency, others attribute it to the 1950s due to the casting of radioactive elements by nuclear weapons across the globe and others still go further back in time and point the finger at farming.

Even though the debates and historical reflections are important, it is necessary to realize that the climate crisis requires immediate attention, and many people around the globe have no luxury for debates while they face the threat of extinction while standing in line behind many other species that are facing rapid and mass extinction at a rate never seen before.

The first major problem is that climate change is a global hazard that is not limited to national borders. Therefore, malicious practices in one country have major consequences on the lives of people thousands of miles away from that country’s borders. Air pollution in Asia can have profound effects on the air in the Middle East and even further. Dumping plastic waste in the oceans affects not just humans but aquatic life as well. The danger cuts across borders and species. The opportunity here is that the international community gets to work together and is united against a common enemy. The global Sustainable Development Agenda is a good example of this cooperation. This cooperation ranges from technical to financial arrangements where the knowledge of experts and government and private resources are pooled in order to fight the threat of climate change.

In Global South, countries should take advantage of available support from development partners to address climate change. For example, through Forum on China-Africa Cooperation (FOCAC), African countries should use this opportunity and intensify programs meant to address climate change.  This can be achieved by ensuring that resolutions of FOCAC Dakar Action Plan 2022-2024 in which China pledged to support African countries’ efforts in addressing climate change are all implemented.

The climate change crisis has shown that the status quo is weak and does not work. We cannot simply ignore the problem away. Our institutions and systems require radical change. This presents a unique opportunity to ‘reset’ our world into a more liveable place. If anything, the climate crisis has shown us that our current trajectory will lead us to extinction, therefore, we require to make radical reforms in our economic, social, and political systems to address current realities and ensure the continuation of our species.

Using the example of Uganda, which is commonly known as the pearl of Africa for its stunning scenery, extensive flora, and fauna, and diversity of cultures, a keen observer will notice the many negative consequences of climate change. The first thing to notice is the increasingly unstable and unpredictable seasons, reduction in forest cover, and the frequent onset of flooding and famine. All these phenomena and much more are closely related to climate change. Our old methods of farming, fishing, and exploitation of resources are failing us. Therefore, new more modernized farming methods have to be adopted, new technologies need to be learned, and government has to implement effective climate change mitigation measures. This means new education systems that will produce new experts. It also means we can have a new kind of green-oriented economy that will create new competitive sectors and jobs.

It is true that the third world is unfairly affected by both climate change and climate change solutions. This is a challenge that international bodies need to take seriously and find means to address. The stage has been set in recent United Nations Climate Change Conferences to address the challenges in the global south even though progress is still rather slow. Perhaps this entails a detailed discussion for another day.

The Writer is a Research Fellow for Development Watch Center.

Uganda-China Relations: Partnership of Equals and Win-Win Cooperation

Posted on By Sino Uganda Research Centre

By Ndunaka Godswill Chikamso

Like many other countries, Uganda has been seeking foreign investment and partnerships to drive economic development and the country has made significant strides towards economic development in recent years, thanks to the support of various international partners. One such partnership that has been growing in significance is China-Uganda Relations.

China and Uganda have a longstanding relationship dating back to the early 1960s when Uganda gained independence. The relationship has been characterized by cooperation in various areas, including trade, infrastructure development, and education. Over the years, China has provided significant assistance to Uganda in the form of aid, loans, and investments opportunities. In 2018, China was Uganda’s largest trading partner, with bilateral trade worth over $1.2 billion. Since then, Beijing remains one of Uganda’s leading trade partners and major source of foreign direct investments (FDI).

With China introducing zero tariff to Ugandan goods which will see Ninety-eight percent of Ugandan goods accessing Chinese market tariff free, trade between the two countries is expected to grow further. Last year, Chinese Ambassador to Uganda, Zhang Lizhong announced the Special Preferential Tariff Treatment of Ugandan Exports to China, explaining that this was in line with commitments made by China at the Eighth Ministerial Conference of the Forum on China Africa Cooperation (FOCAC) held in Senegal last year.

Even before the said Special Preferential Tariff Treatment, China has been investing heavily in Uganda, particularly in infrastructure development projects such as roads, bridges, and power plants. The most notable project is the 51 kilometers Kampala-Entebbe Expressway, which was constructed with a loan from China’s Exim Bank and has greatly improved the country’s transportation sector. Additionally, China has financed the construction of the Karuma and Isimba hydroelectric power plants, which will increase Uganda’s energy capacity and reduce its dependence on fossil fuels. The entry of Chinese construction firms into Ugandan market is always cited as the reason for reducing billing prices for road construction in Uganda. Indeed, at the time when European companies were dominating road construction business, the construction of one kilometer took about 3.1 billion shillings compared to current rate of about 2.1 billion shillings per kilometer.

China has also invested in Uganda’s telecommunications sector, with Chinese companies such as Huawei and ZTE playing a significant role in the country’s development of 4G networks and fibre optic cables. This has greatly improved internet connectivity in Uganda and provided opportunities for innovation and entrepreneurship.

Another sector that China has played a significant role in Uganda’s economic development is supporting the country’s infrastructure especially road and energy sectors which has in turn helped easing transportation of goods and services and also helped in addressing unemployment challenge. In 2014, while closing a two-day Pan African Youth Conference at Serena International Hotel Conference in Kigali Rwanda, President Yoweri Museveni explained that “infrastructure development such as Roads, Electricity and Railway in any country is of importance as it attracts investments and creates jobs for the youths.”

In 2017, while on a visit to Uganda, Christine Lagarde, then Managing Director of the International Monetary Fund (IMF) credited Uganda for what she described as “Uganda has appropriately embarked on a strategy of scaled-up infrastructure investment in the energy and transport sectors to relieve key growth bottlenecks and enhance regional linkages.” Lagarde argued that “focusing on overcoming implementation challenges, including through strengthening public investment management, should help ensure that these investments yield the desired outcomes in terms of higher growth and job creation.”  If critically analysed, the improvement and development of Uganda’s energy and infrastructure sector became possible largely because of China’s assistance.

Today, Africa’s biggest challenge, especially Sub-Saharan region, is poor and aging infrastructure.  A 2022 study by McKinsey and Company concluded that unless addressed, infrastructure deficits in key sectors such as roads and energy will continue to hinder African countries’ economic growth and development especially in Sub-Saharan Africa. The study concluded that while the region is faced with high demand of infrastructure development, there are few partners or investors willing to provided huge amounts needed for such projects. Therefore, China’s readiness to back such projects in Uganda and Africa in general cannot be underestimated.

However, while China’s hand in supporting African countries infrastructure is a big boost, Uganda and other African countries must should only borrow and invest in projects that can easily spur economic development as a way of ensuring easy servicing of loan facilities extended while undertaking such infrastructure projects so that issues such as rising debts critics often point at are avoided.

That said, there are multitudes of opportunities that comes with steady and good relations between China and African countries. The other area with huge potential for cooperation is in the field of agriculture. While China is already working with Uganda in this area especially through FAO-China South-South Cooperation (SSC) in which China has since 2015 been supporting agriculture initiatives in Uganda, if projects under SSC especially its phase III are spread throughout the country, more fruits will be realized in a short period. SSC has potential to spark Uganda’s economic development especially if they work together with Uganda government’s introduced Parish Development Model (PDM).  Uganda is an agricultural country, and there is a need to enhance agricultural productivity and value addition. With her rich experience in modern agriculture, China can provide technical support, expertise, and investment towards Uganda’s agricultural sector.

In conclusion, China has played a significant role in Uganda’s economic development, providing funding and investment for critical infrastructure projects. China’s engagement with Uganda has brought many benefits, including employment opportunities, enhanced energy capacity, and improved connectivity. While this has brought several benefits to the country, including job creation and economic diversification, there are also concerns about debt sustainability, environmental impact, and the impact on local industries and businesses. As Uganda continues to seek foreign investment and partnerships, it will be important to carefully consider the benefits and drawbacks of these relationships and ensure that they are sustainable and equitable.

Ndunaka Godswill Chikamso is a junior research fellow at Sino-Uganda Research Centre and a Medical student Niger Delta University, Nigeria.

Authorized Economic Operator (AEO) Arrangement Between China and Uganda Will Improve Trade and Help URA in Revenue Collections

Posted on By Sino Uganda Research Centre

By Alan Collins Mpewo

 Technology has been prioritised by many countries allover the world because of the advantages and potential hacks that can be exploited. Often times the exploitation has been used to wage war, spying and propaganda. Other nations to the contrary have taken a distant trajectory from the usual, and used technology to outlive the blocks that avail themselves. Much as technology keeps improving and it still gets so much threat from people’s perception, it should be underscored that technology is the future.

Recently, China together with the Uganda Revenue Authority, a public body in charge of Revenue collection in Uganda, had a commemoration of a memorandum of understanding, that the two parties entered into in 2021. The spirit of the memorandum of understanding was the Authorised Economic Operator (AEO) Mutual recognition arrangement and this was signed at the 5th AEO Global Conference that was held in Dubai.

Uganda would be able to benefit from the arrangement in terms of streamlining trade finance and revenue collection which is aligned to China’s Revenue collection practices and enhancement of trade framework. If critically analysed, the main informing aspect for Uganda to enter this mutual arrangement was on a basis of China’s stand on the global floor of trade. The arrangement was also meant to further the corporation between Uganda and China on the basis of the Forum on China-Africa Cooperation (FOCAC). This way, Preferential treatment will be accorded to the goods coming from China to Uganda and vice versa. Therefore, this will be a wake-up call for companies that engaged in supply of goods, works, and services to and from Uganda and this can be confirmed to thus far have been achieved on great strides.

Numerous companies have taken part in registration and confirming participation in this great initiative and it can safely be said that there have been more than 5,000 Chinese companies and over 150 from Uganda adapting to this new trade arrangement. The good news with this is that over 230 companies from both countries have since engaged and participated in trade together using the arrangement and about 130 billion have been collected by the Uganda Revenue Authority for the trading done by those companies along the border and within the boundaries of Uganda. The value of the trade between the companies in both countries has also increased in the recent financial year to over 750 billion Ugandan shillings. This goes back to the objectives set out in the various Corporation agreements that two countries have been engaged in, in the recent years.

The most known modern way the countries worldwide are able to facilitate state activities and governments is through revenue collection and this is the main basis for engaging into this kind of arrangement by the two players. Therefore, each country twice as much to simplify not only ways of generating more revenue but also without inconveniencing the taxpayer while maintaining stable means of putting such finances to productive use. As far as application of the revenue is concerned, Uganda still grapples with all possible forms of corruption and should therefore seek as much of lessons from China to make sure that their education of the vice is also a major objective if it wants to make proper realisation of the revenue’s benefits.

The two countries also realised the adverse effects of delay in transportation of goods and services across boundaries and therefore since data is one of the most important resources in a government can have grip on, since this arrangement is also meant to enable easy data sharing on various cargo that would be transported to and from the two countries.

However, with multi border trade comes risks and therefore imperative to come up with risk assessment to measures. In this case, the arrangement was also meant to provide for better grip on the control of the Trade Practices between all key players during transportation and find a delivery of the goods to the consumers. On another bright side, the arrangement has since helped to increase competitiveness among the companies involved in the platform in as far as manufacturing, packaging, delivery, and response to consumer feedback. With clearance now eased, goods and services will be able to reach their final destination in the shortest possible time and also enable the companies involved to compete and set up themselves for better and bigger deals in the trade sector. Presently, more than 20% is being benefited from only the companies that are participating in this arrangement which is a great side and commendable initiative by the two countries. The figures from China are equally promising and therefore an indicator of why good international relations is important and a stable means of achieving much of the goals amongst various nations.

Tax evasion is a crime that many countries grew up with fighting to the nail to make sure that its effects are greatly eradicated. Otherwise, failure to combat such vices undermines efforts that would have been invested. Therefore, this calls for possible forms of compliance with the day’s tax laws, regulations, and practices. The benefits of this arrangement can not be overemphasized, but ultimately, with furthered sensitization, there will be more players joining along the way.

Alan Collins Mpewo, is a Senior Research Fellow, Development Watch Centre.