The Uganda Investment Authority (UIA), Development Water Centre (DWC), and Sino-Uganda conducted a symposium on Uganda-China ties in the New Era on Thursday, July 27, 2023, at the Fairway Hotel in Kampala. It was graced by the First Deputy Prime Minister and Minister for East African Affairs, Rebecca Kadaga, and the Chinese Ambassador to Uganda, H. E. Zhang Lizhong. UIA’s Chair, Morrison Rwakakamba, made a presentation on the topic “Diplomacy and Social Economic Development: Lessons from China-Uganda Relations”. He was represented by UIA’s Deputy Director of Business Development, Peter Muramira. We reproduce the speech verbatim (transcribed by Shamim Saad and Babra Nabunya):
Who we are
Uganda Investment Authority is a Government agency whose core mandate is to promote, attract and facilitate all forms of Investments in Uganda. UIA also initiates and supports measures that enhance Investments in Uganda. It advises the Government on the appropriate and suitable investment policies. UIA enables both local and domestic investors to access the right investment information to enable them to make well-informed decisions. It offers investment support and advocacy services. It registers and licenses all forms of investments in Uganda. It manages and oversees the development of industrial parks in Uganda.
Introduction
Diplomatic relations between nations play a crucial role in shaping their socio-economic development. China-Uganda relations offer a relevant case study, as the partnership has been characterized by extensive collaboration in various sectors, yielding notable socio-economic benefits for Uganda. This topic aims to explore how diplomacy has contributed to socioeconomic development while drawing valuable lessons from China and Uganda’s partnership
Historical Context of China-Uganda Relations
China and Uganda have a long diplomatic history dating as far back as the post-independence era. On October 18, 1962, Uganda and China formally established diplomatic ties that would later steer mutual cooperation between the two countries. Bilateral relations between the two countries entered a new stage of development upon NRM’s ascendance to power in 1986 which saw bilateral cooperation expanding and an increase in mutual high-level exchanges. Since then, China’s contribution to Uganda’s economic and social development has been on the rise.
Diplomacy as a catalyst for social economic development.
Diplomatic relations between Uganda and China have indeed fostered social economic development in several ways. First and foremost, China’s contribution has mainly been directed towards infrastructural development information of technical assistance, project aid, and business-related services. Today, China is Uganda’s biggest source of Foreign Direct Investment (FDI) with Investments ranging from industries in the manufacturing sector to road construction. China’s Investment footprint is visible across the country. China’s investment in Uganda’s industrial sector is also playing a key role in Uganda’s economic development with the introduction of industrial parks in Mbale, Kapeeka, and Jinja that are run and operated by Chinese investors.
In addition, China’s contribution to infrastructural development, particularly in the areas of transport, energy, and information technology, has also facilitated economic development. For example, the Entebbe-Kampala Expressway that links Entebbe International Airport and Kampala was funded by the Chinese Government through the Exim Bank of China to the tune of $350m.
China’s funding of projects in Uganda’s energy sector has addressed the issue of power shortage and high tariffs that initially affected Uganda’s industrial sector and in turn, boosted economic development. Key among these Chinese-funded projects is the 600MW hydropower plant constructed along the River Nile in Northern Uganda and the Isimba hydropower dam in Kayunga District. These projects have been significant because industrialization which is earmarked to ensure continued economic development thrives on increased electricity capacity.
China has also enhanced Uganda’s economic development through its concessional loans that have financed a number of projects in Uganda under the Forum on China-Africa Cooperation (FOCAC) mechanism where China provides aid in the form of debt forgiveness, aid grants, concessional loans, and interest-free loans.
Furthermore, trade between Uganda and China has equally soared, which has directly facilitated Uganda’s economic development.
Conclusion
While it is important to further strengthen trade and investment between Uganda and China in the days ahead, Uganda can gain more from this relationship if it insists on greater transparency in Chinese aid flows, further strengthens intra-regional trade, and ensures that further development assistance is aligned with national priorities as formulated in the Poverty Eradication Action Plan and the National Development Plan 3.
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