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Ugandan fast paced development keeping
on track with Chinese aid and investment

By Ronald Ssekandi KAMPALA Uganda (Xinhua) -- The year 2018 ends on a good note for Uganda as the east African country eyes more financing and investment from China.

After the 2018 Beijing Summit of the Forum on China-Africa Cooperation held in early September, the Ugandan cabinet quickly formed an inter-ministerial committee to strategize on how the country can dovetail with China’s major initiatives to enhance cooperation with Africa backed by a 60 billion U.S. dollars’ pledge over the next three years.

The inter-ministerial committee is now looking at bankable projects that it can share with China for financing.

Days before the Beijing summit, Ugandan President Yoweri Museveni told Xinhua in an interview that the country was focusing on infrastructure development and attracting more investment from the Asian country.

“We are likely to advance the project of the Standard Gauge Railway (SGR) that is in the government-to-government (talks),” Museveni said.

Experts say the SGR will reduce the cost of transport and spur economic development. The railway line is expected to reach the border areas with Rwanda, South Sudan and the Democratic Republic of Congo from the Kenyan seaport of Mombasa.

Over the past several years, Uganda has been touting infrastructure development as a key ingredient in fast-tracking its economic growth.

To finance the infrastructure development agenda, Uganda looked at China because of the country’s favorable lending terms compared to some of the western global financiers.

Mid this year, the Kampala-Entebbe Expressway, linking the capital Kampala to Entebbe International Airport, the country’s gateway to the rest of the world was completed. China financed the construction of the mega road project, the first of its kind in the country.

China is also financing the expansion of Entebbe International Airport. Official figures show that after completion of the first phase of the expansion, the cargo center can handle up to 150,000 metric tons of goods, compared to the previous 69,000 metric tons.

In the northern part of Uganda along River Nile, the world’s longest river, China is constructing the 600MW Karuma Hydropower Plant. While touring the facility in July, President Museveni said he was amazed by the progress of the works, noting that the plant will not only address Uganda’s inadequate power supply, but also youths have been skilled through the construction process.

Further upstream River Nile, in the central Ugandan district of Kayunga, construction of a Chinese-funded 183MW Isimba Hydropower plant is near completion. According to the Chinese engineers on site, power generated by the plant is expected to come onto the national grid early next year.

Economists have argued that the inadequate and yet expensive power was hindering the country’s economic development. The two power plants of Isimba and Karuma, when completed, are expected to address Uganda’s inadequate power supply.

Uganda is among the top four investment destinations for China in sub-Saharan Africa, according to the Chinese embassy here. The Foreign Direct Investment (FDI) from China to Uganda was 219 million dollars in 2017. Investments from China contributed over 40 percent of the total FDI in Uganda in 2017.

To attract more investors, the Ugandan government has adopted an industrialization policy. It has designated over 22 industrial parks across the country where investors can set up base, taking advantage of the incentives that come with establishing their factories in the parks.

Chinese private investors have taken this up and some have even set up their own industrial parks.

In October, President Museveni launched the first phase of a 620 million U.S. dollars Chinese industrial project in the eastern district of Tororo.

The project, dubbed Uganda-China Free Zone of International Industrial Cooperation, undertaken by the Dongsong Energy Group, will manufacture glass, steel and organic-fertilizers, creating about 3,000 jobs at peak when completed in 2020.

About 40 km north of Tororo district, Museveni in March this year launched another Chinese-owned Mbale Industrial Park. The park owners, Tian Tang Group, said it will attract more than 30 investors with a total investment of about 600 million dollars and an annual output value of 1.5 billion dollars. The park will directly employ about 12,000 locals.

The 220-million-dollar Kehong China-Uganda Agricultural Industrial Park, is another park that Uganda says will play a critical role in transforming the country’s economy.

Almost 80 percent of the country’s population derives its livelihood from agriculture, according to government figures.

When fully operational, Kehong China-Uganda Agricultural Industrial Park is expected to produce about 600,000 tons of agro-products annually to meet the domestic and regional  market demands.

It will also create 25,000 jobs as well as availing opportunities of training for the local people, according to the managers of the park.


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