Tag: Uganda

China Expands Africa’s International Trade Potential

Posted on By Sino Uganda Research Centre

By Nnanda Kizito Sseruwagi

Any country’s development plays out based on its participation in international trade. Countries with higher participation in global trade are comparatively wealthier than those with lower participation. Therefore, for African countries to develop, they must increase their business involvement with other countries on the international market. Several factors determine this. One of those is the availability of cheap long-term financing for infrastructure that supports production such as roads, dams, etc.

Chinese lending in Africa can be observed to increase the participation of borrowing countries, especially in Sub-Saharan Africa, in international trade. Whereas other major funders in Africa such as the World Bank concentrate their resources on social sectors like education and health, which are equally important, China focuses more extensively on infrastructure, particularly transport, energy and communications.

Research shows that funding towards these sectors which China is keen on achieves practical, significant results for African countries by increasing their potential to share in global value chains.

Over time, Chinese funding for roads, railways and hydropower dams in Africa can be seen to immensely reduce trade costs for African countries while at the same time enhancing their connection to international markets by linking landlocked areas to the coast and connecting seaports.

Since African countries are still limited in their manufacturing capacities, it is difficult for them to have an immediate advantage over more developed countries in the entire value chain of international goods. Those developed countries have centuries of efficient production techniques under their belt. However, by enabling Africa to access markets, China pushes us one step towards competitively playing in the international market.

Of course, we cannot avoid contrasting the disparity in approach between Western funders and China. I think as a recent comer to the scene of developed countries, China has a more practical appreciation of what developing countries need to spur development. It also has a fresh memory of poverty, which aligns its development experience closer to Africa’s. therefore, whereas Western funders are hellbent on dictating moral environments upon African societies as a pre-requisite for their funding, and stage-managing the results, which are often smaller than they are projected and reported to be, China on the other hand is culturally less arrogant but more practical on making results.

Chinese development finance institutions like China Development Bank and China Export-Import Bank (Eximbank) can be observed to respond to African countries’ industrialization agendas. They fund public infrastructure that supports value-added production and international trade.

This funding comes both through Chinese Development Lending (particularly concessional loans) and from China’s Belt and Road Initiative under which China directly builds infrastructure that removes trade inefficiencies like slow production and costly transportation of goods often caused by poor transport and communication networks.

Efficient transport infrastructure is very important for African countries to access the international market. Research shows that each day a good spends in transit translates into a taxation cost based on the value of the good. We should avoid unnecessary delays of our goods in transit if we are to compete better.

African countries also produce mostly raw materials and trade more in parts and components rather than final products. Such goods are much more affected by time delays than final goods. Therefore, for African countries to benefit more in international trade and reduce costs, efficient transport and communication infrastructure is fundamental.

Another area supported by Chinese funding is domestic industrialization in various African countries. Uganda is a key example, with several industrial parks established with China’s support, such as Mukono Industrial Park, Shandong Industrial Park, and Sino-Uganda Industrial Park in Mbale. By supporting the industrial capabilities of Africa, China helps us reduce imports and increase value-added exports, thus transforming our economies toward upstream positions in international production networks.

Additionally, having strong domestic industrial capacities lowers Africa’s need to import inputs used in the production of exported goods. It also reduces our dependence on foreign industries for goods which sometimes are unavailable or become very expensive due to production disruptions. We cannot forget that during the COVID-19 pandemic, we suffered “vaccine discrimination” while most countries hoarded tons of vaccines. That was a crisis we must never suffer again. We must therefore invest in our industries and also enhance the production of domestic value-added goods, which will buy us a higher place in the global value chain.

With the support of non-politicized Chinese funding, we can mitigate liquidity constraints which often limit our exporting capacity since exporters usually need the push of external capital to enter foreign markets. Africa’s weak financial institutions can never reasonably support our development because they are very risk-averse. We need to complement the little funding they are willing to provide with China’s generous, long-term credit.

Lastly, educating our children and youth is very important if we are to compete in the highly innovative and competitive international world. African governments should invest in a highly educated labour force to increase their chances to access global markets and participate more in higher value-added activities. Only by investing in innovation can African States help domestic producers meet the international standards required by global buyers.

The author is a senior research fellow at the Development Watch Centre.

China’s Contribution Towards Uganda’s Socio-Economic Development: The Tale of an Ordinary Ugandan

Posted on By Sino Uganda Research Centre

By Salim Abila Asuman

In the dynamic arena of discourse and debate, where narratives clash and ideologies collide, one principle stands as a beacon of clarity: the irrefutable power of facts, where empirical evidence and data stand as towering pillars, guiding us through the fog of uncertainty towards the beacon of truth.

As I embark on this journey to demystify two broadly told misconceptions about Africa-China relationship, I delve into a riveting account where facts have triumphed over conjectures and falsehoods.

However, first and foremost, at the heart of this article lies the undeniable facts surrounding China’s contributions to Africa’s development, a narrative marked by infrastructure investments, trade dynamics, and technological exchanges.

In unlocking Africa’s potential, China’s impact on its development including Uganda can be summarised by three key power facts;

First; One of the most visible aspects of China’s involvement in Africa is its extensive investment in infrastructure projects. From highways to railways, ports to telecommunications networks, Chinese funds and expertise have transformed the continent’s physical connectivity. These developments not only facilitate intercontinental trade and commerce but also lay the groundwork for sustained economic growth and regional integration.

Second; China has emerged as Africa’s largest trading partner, with bilateral trade volumes soaring to unprecedented heights. Chinese investments, spanning diverse sectors such as manufacturing, mining, and agriculture, have injected vitality into African economies, creating jobs and driving industrialisation.

Third; Beyond bricks and mortar, China’s engagement with Africa extends to knowledge sharing and capacity building initiatives. Through technology transfer programs and educational exchanges, China has played a pivotal role in enhancing Africa’s human capital and fostering technological innovation. Whether in renewable energy projects, information technology hubs, or agricultural modernization efforts, these partnerships hold the promise of unlocking Africa’s full potential.

In the epic battle between truth and deception, these facts emerge as the fearless cavalry charging through the darkness, their blazing light cutting through the fog of falsehood and misconception, and unveiling the unvarnished truth in a dazzling display of unwavering resolve.

In the face of the three (3) aforementioned facts, the misconception and falsehood that China’s engagement in Africa including Uganda is solely exploitative hides its self because it blatantly disregards the various infrastructure projects and investments that have benefited African economies. Because obviously, all those infrastructure projects and investments cannot just be for a show, and not actually benefiting Uganda and Africa at large.

Additionally, there’s another misconception that China’s presence undermines democracy and human rights in Africa, this overlooks the diverse relationships African nations have with China and the agency these nations exercise in their partnerships.

It is important to consider the nuances and realities of China’s involvement in Africa rather than subscribing to oversimplified narratives of domination.

In the intricate web of progress and development, the true measure often lies in the eyes of those most intimately woven into the fabric of society, its citizens.

Among them, the ordinary man or woman stands as a guard, bearing witness to the ebbs and flows of change. Their gaze, unclouded by bureaucracy or bias, offers an optical prism through which the true essence of societal transformation is refracted.

Through their lens, we glean insights beyond statistical analyses and policy briefings findings resonance in the subtleties of lived reality.

Join me as I uncover a riveting account that underscore the transformative might of factual evidence garnered from a conversation with an ordinary man, unraveling the essence of progress in its purest form.

As I hopped onto a Boda Boda for a ride through the bustling streets of Kampala, little did I know that our journey would offer more than just a means of transportation. Engaging in a conversation with the Boda Boda rider, the seasoned Boda Boda rider, provided a unique window into the transformative impact of Chinese investments in Uganda.

As we weaved through the city’s traffic, His gravelly voice cut through the noise, painting a vivid picture of Chinese involvement in Uganda’s development. ‘’You see, Friend, he began, ‘’it is very visible the Chinese, they have got their fingers in every pie in Uganda, they do’’

Intrigued, I probed further, prompting him to elaborate on the tangible manifestations of Chinese investment that he encounters daily on the streets of Kampala. ‘’oh, you name it! He exclaimed over the roar of the motorcycle engine, ‘’ Take a stroll down the road, and you’ll see those smooth highways. Yup, the Chinese built the Kampala-Entebbe Expressway, making travel a breeze.

As we navigated through the city. He pointed out landmarks that stood as testament of Chinese contributions. ‘’ And those power plants?’’ He shouted above the din of traffic. ‘’ The Karuma and Isimba dams, powering up people’s homes, all are built by the Chinese.

As our journey continued, His insights devolved deeper into the social impact of Chinese Investments. “Oh, they’re not just about making money, you know,’’ He remarked earnestly. ‘’Remember that hospital they set up? The China-Uganda Friendship Hospital in Naguru, with state-of-the-art equipment, all courtesy of China.

Through my ride, I gained a newfound appreciation for the depth and breadth of Chinese investments in Uganda. From infrastructure projects to social development initiatives, the impact of Chinese engagement is palpable on the streets of kampala and beyond.

As we reached our destination, I thanked the Boda-Boda man whom upon asking his name found out he is called Sebufu John for these invaluable insights into the transformative role of Chinese investments in Uganda’s development journey.

Our conversation served as a reminder that progress often takes shape amidst the hustle and bustle of everyday life, where ordinary individuals like John are witness to extraordinary transformations driven by global partnerships and shared aspirations for a brighter future.

The writer is a research fellow at the Development Watch Centre.

China’s clean energy excellence: Reflecting on Kiira Motors

Posted on By Sino Uganda Research Centre

By Nnanda Kizito Sseruwagi

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

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

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

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

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

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

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

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

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

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

Nnanda Kizito Sseruwagi is a senior research fellow at the Development Watch Centre.

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

Posted on By Sino Uganda Research Centre

By Shemei Ndawula

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

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

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

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

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

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

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

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

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

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

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

From Herbal Remedies to Holistic Harmony: Unveiling the Power of China-Uganda Medical/Cultural Diplomacy

Posted on By Sino Uganda Research Centre

By Shemei Ndawula

The recent “China and Africa: A Fine Traditional Culture and Modernisation” lecture organised by the Development Watch Centre and China-Africa Institute  sparked a fascinating conversation about the opportunities for collaboration between these two vibrant continents. Our collaborations have typically been defined by economics and infrastructure partnerships but beyond these, a particularly intriguing prospect lies in the potential for medical diplomacy and cultural exchange. China and Uganda can leverage their unique strengths in traditional medicine, foster intercultural understanding, and ultimately, advance through a process of mutual learning and convergence of knowledge.

The People’s Republic of China and Uganda boast of rich histories of traditional medicinal practices. In China, Traditional Chinese Medicine (TCM) has flourished for millennia, with a holistic approach that emphasises harmony between the body, mind, and spirit. Practices like acupuncture, herbal remedies, and dietary therapy form the core of TCM, offering effective treatments for various ailments.

Uganda, on the other hand, possesses a treasure trove of indigenous medicinal knowledge. Local healers, across the various cultural spectrums utilise plants, animal products, and rituals to treat illnesses. This creates a vast repository of traditional practices that holds an intricately rich capacity for scientific exploration and drug discovery.

The potential for collaboration between these two systems is immense. China has over the years developed advanced research capabilities and clinical experience which can be combined with Uganda’s rich biodiversity and indigenous knowledge. Exploring joint research efforts could have the potential of inspiring the development of innovative, culturally-sensitive treatments for diseases prevalent in both regions, like Cancer, HIV/AIDS, and various chronic conditions. Cultural exchange programs will also likely bring together practitioners of TCM and Ugandan traditional medicine to form a modern mastermind. Sharing knowledge about diagnosis, treatment methods, and the underlying philosophies can foster mutual respect and lead to the integration of effective practices from both systems.

We already have an established culture of  academic exchanges between Chinese Universities and research institutions in the two countries and if this is expanded to include medical research it can facilitate knowledge sharing in areas like pharmacognosy (the study of medicinal properties in plants) and ethnomedicine (the study of traditional medical practices). This exchange can contribute significantly to the advancement of both traditional and modern alternative medicine.

Beyond the specific practices of medicine, China and Uganda have much to learn from each other’s hoard of cultural wealth. China’s long history and emphasis on social harmony (Confucian principles ) offer valuable lessons for Uganda’s young democracy to chart its own identity politically and socially. Creating unique Ugandan solutions to Ugandan problems like the Chinese developed a unique system of governance and values that has shaped their society. Conversely,Uganda’s vibrant artistic traditions and strong community spirit have the potential of enriching Chinese society.

Intercultural learning programs already in place like the Confucius institute in Makerere foster understanding by promoting language exchange, artistic collaborations, and student exchange programs. These initiatives bridge the geographical and cultural distance, creating a space for mutual appreciation and respect.

The process of collaboration should however not be one-sided. It should be a journey of co-creation, where both cultures contribute meaningfully. Uganda should bring to the table its knowledge of medicinal plants and traditional healing rituals. In return, China can offer expertise in clinical research, drug development, and modern medical technologies. Additionally, the government of Uganda needs to also start making conscious efforts towards bridging these gaps. This should be by widening the resource envelope for research platforms like Universities and think tanks and also repealing much of the red tape that encumbers our research capacity.

This intercultural approach would not only enrich healthcare systems but also foster a deeper understanding between the two countries. By recognising the value of each other’s traditions and fostering collaboration, China and Uganda can embark on a path of mutual advancement. This is already a concept being pioneered at the African Rural University in Kagadi where a significant number of senior lecturers have little to no formal education but are quite knowledgeable in African traditional wisdom. The Chinese story with their Confucian schools of thought has done the same thing with resounding success and this is definitely something we should explore.

The path of collaboration is not without its challenges. Intellectual property rights regarding traditional medicine knowledge need careful consideration. Additionally, ensuring the safety and efficacy of traditional remedies requires rigorous scientific validation.

However, these challenges can be overcome through open communication, transparent research practices, and collaboration with international organisations like the World Health Organisation (WHO).

By embracing the spirit of medical diplomacy and cultural exchange, China and Uganda can forge a powerful partnership.This collaboration holds the potential to revolutionise healthcare systems, improve public health outcomes, and cultivate a deeper sense of understanding between two culturally rich nations. As they learn from each other’s ancient wisdom and modern expertise, China and Uganda can pave the way for a brighter, healthier future for their citizens and serve as a model for collaborative progress on the world stage.

Back to the 20th China-Africa lecture which inspired this Op-Ed, organised by China-Africa Institute (CAI) and the Development Watch Centre, the lecture attracted a number of scholars with Chinese side delegation of 4 professors led by CAI’s Vice President professor Wang Xiaoming and while Dr. Allawi Ssemanda, the Executive Director Development Watch Centre led the Ugandan side with participants drawn from among others; Mbarara University of Science and Technology, Makerere University, Ndeje University, Islamic University in Uganda, and African Rural University. Further Chinese professors held more community engagement (lectures) with focus on poverty eradication among others.

If such collaborations can be reinforced, both sides stand to benefit as it is one sure way of learning from each other as the two sides embark on building a community of shared future for mankind in the new era.

The writer is a senior research fellow at the Development Watch Centre.

 

Green Beans, Red Tape: EU Climate laws may have unintended effects on Ugandan Coffee Farmers

Posted on By Sino Uganda Research Centre

By Shemei Ndawula

For the past three years the European Union has been drafting and polishing a set of legislations that will potentially have great impact on the lives of many Ugandan coffee farmers once they come into effect at the end of this year. As a country, we have relied on Coffee as our major export cash crop for decades. Right from colonial times when Uganda boosted of a surplus budget most of the national revenue came from agricultural exports of coffee and Cotton. At the moment we export close to 1 billion USD worth of coffee annually mainly to the European markets (Italy alone takes up to 33% of coffee exports).

The legislation, a result of climate change campaigns seeks to implement a stringent import cap on goods like coffee, cloves, rubber from non European countries if their importers can not prove that the land on which they are grown is a product of deforestation. This is definitely a good idea because the rate of deforestation across the globe is worrying. Uganda; thrust to the forefront of the war on climate change because of our location along the equator needs to take more intentional steps towards mitigating widespread deforestation. We are already experiencing record breaking levels of water rising in Lake Victoria as well as flash floods and mud slides in different parts of the country.

However, what this legislation misses out on is that most coffee growers in Uganda are smallholder farmers who are already struggling to meet the quality controls in regards to bean quality and organic farming practices. It will be impossible for the same farmers to put in place the necessary tracking mechanisms to prove that their farmlands comply with the legislation and convince the European Union that they meet the required standards. Needless to say that many of the smallholder farmers are either semiliterate or illiterate and will require a significant amount of time for training and adjustment of their farming practices to fully comprehend the purpose and subject of the legislation let alone implement them.

In fact, many of the prominent coffee producing regions like the Bugisu sub-region and the Kasese region are surrounded by forest reserves with the farmlands coexisting within the trees. In many ways this is a standard farming practice because the root system of the trees holds the soil so that the fertilisers used in the coffee are not swept away by the rain and the fallen foliage from the trees acts as mulch. My family has had a similar agricultural scheme for decades  at our farm in Kasangati(in the outskirts of Kampala) where the coffee is grown alongside timber trees.

It is imperative for the European governments to understand that the most likely scenario that will play out when the legislation comes into effect may not be increased compliance in Africa but rather most multinational coffee exporters will shift their focus to more developed countries like Brazil which can comply with the necessary red tape.  This can spur a domino effect with coffee farmers when deprived of the coffee market resorting to cutting down the trees on the farms to cover their daily needs.

As a profession relying heavily on nature, Ugandan and African farmers have got all the reasons to lead the war on climate change. Our agricultural systems are heavily dependent on weather patterns and many farmers are one or two bad weather seasons from a crisis.

Additionally, setting up these traceability mechanisms will also come with unprecedented compliance costs to provide verifiable proof that the coffee supplied to the European market comes from none deforested areas. This will involve adopting traceability systems, certification processes and quite possibly new farming methods.

The European Union may be better served by simply equipping the farmers with the necessary skills and technology to implement sustainable farming practices. European research has made leaps and bounds in sustainable high impact farming and technological sharing between the two countries would be a huge boon for the coffee sector.

This has been done before by the Chinese in Uganda who set up a large rice growing scheme in Lukaya along the Lwera stretch to set a practical farming standard for Ugandan rice growers to emulate. In the end, Ugandan farmers earn better from their agricultural investment while the Chinese import better quality grain for their population.

The EU’s legislation banning coffee imports from deforested areas is a commendable step towards global environmental sustainability. It unfortunately however;  presents significant challenges for Ugandan coffee farmers  who must navigate increased compliance costs, potential loss of market access, and broader socio-economic implications. To address these concerns, the European Union countries need to implement a multifaceted approach involving international aid, government support, and market diversification strategies. If together we can foster sustainable agricultural practices and provide the  necessary support, it is possible to mitigate the adverse impacts on Ugandan farmers and ensure a more resilient and sustainable future for the coffee industry.

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

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

Posted on By Sino Uganda Research Centre

By Allawi Ssemanda

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Kikuubo Vs Chinese: The dialectics of Uganda’s development

Posted on By Sino Uganda Research Centre

By Nnanda Kizito Sseruwagi

President Yoweri Kaguta Museveni has consistently articulated his vision as well as NRM’s historical mission as the socio-economic transformation of Uganda. This vision/mission entails the transformation of Uganda from a poor, rural, agrarian society to a modern, rich, prosperous, industrial one.

Industrial societies were historically born out of the industrial revolution. The Industrial Revolution succeeded the agricultural revolution as a phenomenon that transformed the global human economy, with an even greater result of overturning the pattern of everyday life.

Human production output greatly increased due to the transition from hand production methods to industrial mechanized factory systems. Although the revolution was sparked off in Britain in the late 18th century, it later coursed like strong wine through the veins of North America in the early 19th century and further spread from Western Europe to Japan in the late 19th century. It is argued that since China had a long history of fluent pre-industrial production methods, it prevented it from experiencing the economic pressure that necessitated the industrial revolution in the West.

Now, let us turn back to Uganda. Over 70% of Ugandans are still peasants cultivating the land. Subsistence agriculture allows them a meal, but nothing extra to sell, participate in the monetary market or contribute taxes to the national treasury. Therefore, the majority of the Ugandan population is absent in the country’s economic production system, but very present in the country’s budget expenditure for public goods and services. This is disastrously unsustainable.

Then enters the billionaires of our economy – the Kikuubo traders. Kikuubo is a long-stretch of retail businesses in an open market in downtown Kampala.

That hyperactive, narrow business corridor is famed for offering all types of domestic goods at fairer prices compared to other retail shops across the country. It attracts retailers who buy imported merchandise cheaply and restock it in their up-country Dukas at a higher price. The transactions traded in that half a kilometer of shops are estimated to be billions of dollars annually. This explains why it is the Mecca of most of Uganda’s successful indigenous entrepreneurs.

Kikuubo is an important piece in the economy of Uganda not only because it has made many of our local businesswomen and men, but also because it takes relatively less capital to compete for business opportunities and gainful employment as compared to agriculture.

Recently, businesspeople under the Kampala City Traders Association (KACITA) have been demonstrating against what they call Chinese retailers who are allegedly taking over their business model in Kikuubo. However, the logistics of executing retail business in a foreign country involves so many factors which make it a very expensive venture. These factors should necessitate us to examine these claims a little further.

These traders met with President Museveni on 19th April 2024, to hear out their concerns. He later wrote a detailed comment about this meeting. I was very pleased to see that he termed it as “historic” because it “involved the debate on whether Uganda should break out of the colonial and neo-colonial slavery of producing what we do not consume and consuming what we do not produce”.  This is a profound debate to have in our country. We should have it more frequently.

The president highlighted two important issues to the traders. But his message might have been delivered halfway because of his indirect approach to communication in the spirit of politeness. But I felt that he was courteously rebuking them. He was showing them that exporting raw material from Uganda to foreign industries while importing manufactured goods back home to Kikuubo, is not a model that would develop our economy and transform our society.

In emphasizing how important their business is, the traders told the President that people travel from as far as Congo (DRC) and South Sudan to buy goods from Kikuubo. But the president wisely reminded them that that is a dangerous trap because “it turns the whole of East and Central Africa, into a dumping ground for foreign consumers and capital goods”.

Mr. Museveni was indirectly defending the factories set up with the help of the Chinese in the Sino-Uganda Mbale Industrial Park. Commissioned by himself in 2023, these 16 new factories covered a range of industries where Uganda lost a lot of money while exporting products such as adhesives, chemicals, jeans, textiles, and electronics. Therefore, through these factories, we are both saving money but also creating jobs for thousands of Ugandans. Most importantly, as noted by the president, these industries will enable us to develop our own industrial capacity. The president decried the incapacitation of African economies which import “big items such as air-crafts etc. and also the most ordinary such as clothes, food, etc.” which stunts our growth.

No country in the world ever transformed from a poor agrarian society as Uganda is to an industrial modern economy as Ugandan aspires to be, through the exportation of foreign goods and reselling them at a profit in one’s home country. It doesn’t matter whether Kikuubo employs a million more Ugandans tomorrow and makes tens of billions of dollars in profit, that model of entrepreneurship has never transformed any country and will never transform Uganda.

Our development will come from national companies. Indigenous capital remains the major, historically known stimulus of transformative economic growth. Since Uganda lacks expertise in manufacturing, our Chinese partners have taken the unenviable task of helping us set up industries that manufacture goods which most other countries would rather only export to us. Ugandan youth are working in these factories, learning how to use industrial machines and also make them. As such, the market is reasonably going to be shocked by the massive production of cheaper textiles and electronic products which are manufactured from Mbale or Kapeeka and from all these industrial parks which the government has set up. We need to either embrace them and start buying and selling Ugandan-made goods, or endure the obvious competition likely to come from these domestic goods. Let us not be trapped by the old ways which international capital accustomed us to get used to.

The author is a senior research fellow at the Development Watch Center.

nnandakizito@dwcug.org

 

 

Chinese perspectives on Africa’s late industrialization

Posted on By Sino Uganda Research Centre

By Nnanda Kizito Sseruwagi

Africa and China’s cooperation recedes hundreds of centuries back. Over 600 years ago, East Africa was one of the areas that cross-pollinated with Chinese civilization through interactions with the voyages of Zheng He, one of China’s greatest navigators. Zheng’s navigations to Africa manifested the Chinese traditional philosophy of harmony, a notion that still resonates in Africa-China relations today. I started with a cursory narration of Zheng He’s trips to Africa to lay out a historical context of these two ancient civilizations’ partnership in view of discussing the delayed industrialization in Africa, yet inspired by the quick modernization in China.

We are now in the first quarter of the 21st century – an age increasingly taken over by the fourth industrial revolution, and Africa remains largely a raw material production instead of an industrial production continent. Whereas we make up 18% of the global population, we contribute less than 3% to the global Gross Domestic Product (GDP).

I don’t intend to sound blameful of Africans and African leaders for Africa’s current development burdens as is commonly done by those who reason by analogy. But I cannot escape describing the depressing political anatomy of Africa currently. I believe that Africa is not on its own path to development, since all factors determinant of this have been overshadowed by Western hegemony. In an attempt to walk in the footsteps of Western countries by mimicking their current governance standards, Africa seems to have failed to “catch up” yet the material crisis at hand is that we are still trying to heal from the past, not to catch up with the future.

Chinese perspectives on Africa’s industrial development are key because of the comparative analysis they offer. China has recently trodden the path that Africa is on. Whereas China greatly learnt or reverse-engineered industrial processes from the West, the Chinese retained control over the vision and character of where their country was headed. As for Africa, the elite-capture by Western ideological persuasion and hegemonic institutions like the IMF and World Bank still obtains. Even when Africans genuinely intend to design policies that respond to domestic realities, they are still fraught with Western epistemic prejudices.

The first step to realising our industrial transformation is taking cognizance of who we are and where we want to go. The Chinese are so sure of who they are and where they are headed. They never blink off their course. As for Africans, our social, economic and political agendas remain dictated from Europe or North America. Whereas these agendas were violently determined during colonialism, the legacy of it is that we sincerely believe them and serve their realisation almost willingly today. The average African elite suffers a Stockholm syndrome which makes him/her a subconscious missionary of Western views about Africa which constrains our agency in mapping our development path. We need to decouple from this mental capture in how we view ourselves and our governments if we are to start domestically industrializing our economies. If an African entrepreneur like Joseph Magandaazi Yiga (Jomayi) is struggling, we need to help them save their businesses even if they individually get punished for their legal liabilities. We shouldn’t think of successful African business people like Hamis Kiggundu as fraudsters. This is purely a colonial-victim mindset.

In just 25 years, China sat on the drawing board and designed and executed a policy that saw it become an industrial powerhouse. Had they viewed themselves through Western lenses, all knowledge would guide them on a path that seeks industrialization across a period of not less than a century.  Africa should forget industrialization if all our central banks and ministries of finance remain controlled by Bretton Woods knowledge. We rather should sit on the drawing board as China did, and fix our troubles ourselves.

This does not mean that things will work in Africa as they worked in China. But it guarantees that for the first time, things will work out on our terms and we shall dictate our path to development.

We must also exploit the market we have of 1.4 billion people. Whereas we lack a price-competitive manufacturing labour-force, we can build momentum for a skilled work-force by internally trading and consuming each other’s goods. Research by the Harvard Business Review reveals that the share of intra-African exports as a percentage of total African exports is 17%, which is far below the 69% recorded for Europe and 59% for Asia. We cannot advance if we never trade with each other because we are still in the nascent stages of industrialization to capably compete at the global market.

Poor infrastructure in Africa must urgently be improved to reduce the cost of trade. Fluency in market logistics is the path along which industrialization happens. Africa should develop its seaports, roads, airports and railway lines to enable commerce. If it remains more expensive to trade with each other because of the disastrous infrastructure on the continent, we shall remain consumer colonies of other continents’ exports. We should maximumly exploit the Belt and Road Initiative to develop our infrastructure.

One factor has been constant in Africa’s underdevelopment – Western interference. There has been an adverse failure of Western development prescriptions for Africa. I don’t understand why we continue to follow such prescriptions to no avail. Western aid and its attendant ideological hegemony continue to promote economic and policy dependence in Africa. If we never seize control of our economies and have autonomy in thinking and designing policies for our continent, how shall we control our future? In whose hands shall Africa’s destiny lie?

The author is a senior research fellow at the Development Watch Centre.

nnandakizito@dwcug.org

 

China-Uganda Cooperation: A Path to Shared Prosperity for Mankind

Posted on By Sino Uganda Research Centre

By Yasiri J. Kasango

The year 2000 marked a pivotal moment in the history of China-Africa relations with the adoption of a collaborative development program between the two friendly sides. The significance of this event was underscored by the adoption of the Beijing Declaration of the Forum on China-Africa Cooperation (FOCAC) and the Programme for China-Africa Cooperation in Economic and Social Development. This landmark declaration laid the foundation for a comprehensive framework aimed at enhancing economic and social development between China and African nations. With a focus on mutual cooperation and shared prosperity, it set the stage for a new era of partnership and collaboration, paving the way for substantive progress in China-Africa relations. 24 years later, the collaboration is yielding results tangible results!

The intergovernmental cooperation between China and African nations has been built upon the principles of equality and mutual benefit, diversity in form and content, emphasis on practical results, pursuit of common progress, and amicable settlement of differences. These foundational principles have served as the cornerstone of China-Africa relations, fostering a dynamic partnership that has led to significant developmental growth across the continent. Through collaborative efforts, China and African nations have embraced diversity in their approaches, recognizing the unique needs and circumstances of each country. By prioritizing practical results and tangible outcomes, the cooperation has yielded concrete benefits, ranging from infrastructure development to socio-economic empowerment initiatives. Moreover, the pursuit of common progress has driven collective efforts towards achieving shared objectives, propelling both China and African nations towards greater prosperity and development. Importantly, the commitment to an amicable settlement of differences has ensured that any challenges or disagreements are addressed through dialogue and negotiation, fostering a conducive environment for sustainable cooperation and growth. Overall, the intergovernmental cooperation between China and African nations, grounded in these principles, has been instrumental in driving developmental growth and fostering mutually beneficial partnerships.

The foundational principles that underpin China-Africa relations have found fertile ground for implementation in the evolving partnership between China and Uganda. As Uganda embraces the principles of equality, mutual benefit, and practical results, demonstrated through its active participation in initiatives like the Belt and Road Initiative (BRI) and FOCAC, the nation stands poised to reap significant benefits. This burgeoning economic cooperation and deepening diplomatic ties exemplify the commitment to diversity and amicable settlement of differences, fostering an environment conducive to sustainable growth and development. Through collaborative efforts guided by these principles, China and Uganda are not only bolstering their own economies but also contributing to the broader narrative of shared prosperity and mutual advancement, serving as a model for constructive intergovernmental cooperation on the African continent.

In recent years, the relationship between China and Uganda has evolved significantly, marked by burgeoning economic cooperation and deepening diplomatic ties. The Belt and Road Initiative (BRI) and the Forum on China-Africa Cooperation (FOCAC) have served as catalysts for this transformative partnership, propelling Uganda onto a trajectory of economic growth and development. As we navigate the complexities of a rapidly changing global landscape, it is imperative to examine the implications of this strategic alliance and its potential to foster shared prosperity and sustainable development in both nations.

The economic collaboration between China and Uganda has witnessed remarkable growth, underscored by the exponential increase in bilateral trade volume. From a modest $600 million a decade ago to a staggering $1.3 billion by the end of 2023, trade relations between the two nations have flourished, driven by mutual interests and complementary advantages. Uganda’s exports to China have experienced a significant uptick, reflecting the burgeoning demand for Ugandan products in the vast Chinese market.

Key agreements signed during prominent events like the China International Import Expo have further solidified this economic partnership, opening avenues for Ugandan businesses to tap into the lucrative Chinese consumer base. The influx of Chinese investments, particularly in sectors such as agro-industry, manufacturing, ICT, and energy, has injected vitality into Uganda’s economy, creating employment opportunities and driving inclusive growth.

China’s robust investments in Uganda extend beyond trade, encompassing critical infrastructure projects aimed at enhancing connectivity and fostering socio-economic development. Projects such as the Kingfisher and East African Crude Oil Pipeline (EACOP) ventures exemplify China’s commitment to supporting Uganda’s energy sector and infrastructure development initiatives. These projects not only facilitate the extraction and transportation of Uganda’s natural resources but also lay the groundwork for long-term economic diversification and sustainability.

Moreover, China’s pledge to finance the renovation and expansion of the China-Uganda Friendship Hospital underscores its commitment to improving healthcare infrastructure and enhancing access to quality healthcare services for Ugandan citizens. By prioritizing investments in healthcare, education, and other social sectors, China contributes to the overarching goal of promoting human development and improving the well-being of the Ugandan populace.

The partnership between China and Uganda transcends mere economic transactions; it embodies a shared commitment to sustainable development and mutual prosperity. By aligning their respective development agendas with the principles of inclusivity, environmental sustainability, and social equity, both nations lay the foundation for a resilient and prosperous future.

China’s emphasis on green energy and environmental conservation resonates with Uganda’s aspirations for sustainable development, particularly in the context of addressing climate change and promoting renewable energy sources. Through initiatives like the Belt and Road Initiative, China can contribute expertise, technology, and financing to support Uganda’s transition to a low-carbon economy and mitigate the adverse effects of climate change.

Furthermore, China’s investment in education and skills development initiatives empowers Ugandan youth with the tools and knowledge needed to participate actively in the global economy. By fostering human capital development and nurturing innovation and entrepreneurship, China and Uganda pave the way for a brighter and more prosperous future for generations to come.

The deepening partnership between China and Uganda represents a paradigm shift in international relations, characterized by mutual respect, win-win cooperation, shared objectives, and tangible outcomes. Through collaborative efforts under initiatives like the Belt and Road Initiative and FOCAC, both nations have the opportunity to harness their respective strengths and leverage synergies for the benefit of their people.

As we navigate the complexities of the 21st century, it is imperative to cultivate strategic partnerships that prioritize sustainability, inclusivity, and mutual prosperity. By embracing the principles of win-win cooperation and forging ahead with determination and vision, China and Uganda can chart a course towards a future marked by shared prosperity, sustainable development, and enduring friendship.

The writer is a research fellow at the Sino-Uganda