China’s footprint in Uganda’s industrial sector
WEDNESDAY SEPTEMBER 5 2018
http://www.monitor.co.ug/SpecialReports/China-footprint-in-Uganda-industrial-sector/688342-4745576-4ifa1h/index.html
In Summary
- Industrialisation: The government’s policy blue print, the National Development Plan, lists the industrial sector as one of the catalysts to a long-term development path towards a successful economy marked by high levels of economic growth.
- However, when it comes to walking the talk, government’s efforts seem wanting and is banking mostly on efforts by the Chinese, writes Frederic Musisi.
Made in Uganda. Chinese Ambassador Zheng ZhuQiang (right) shows to the Vice President, Mr Edward Ssekandi (second right), some of the iron bars made by Tian Tang company in Mbalala on the Kampala- Jinja highway last year. PHOTOS BY RACHEL MABALA
If you had been given a decade to ponder, you would never have imagined that Kapeeka in Nakaseke District, about 63km from the capital Kampala, would emerge from shadows of the guerrilla war that brought President Museveni to power in 1986.
Today, Kapeeka, which is part of the wider Luwero Triangle that was ravaged by the war against the Obote government, is teeming with economic activity – thanks partly to the mad rush for land in surrounding areas and development of Namunkekera Rural Industrial Centre or China-Uganda Agricultural Industrial Park in Namunkekera.
The park, developed as a joint venture, comprises several value chain industries ranging from fruit processing to ceramics manufacturing. Operation Wealth Creation, a government programme, supervises the park.
Officials say a car assembling plant, one of the 50 industries to be established in the park, is in the offing.
Namunkekera Rural Industrial Centre is among the 22 industrial parks so far established by the Uganda Investment Authority (UIA) as one of the interventions to drive industrialisation in the country.
So far, the Chinese investors have developed the park and are currently developing another one in Mbale District. Construction works estimated to cost $600m (about Shs2 trillion) for the Mbale park were flagged off in March. A consortium of eight Chinese enterprises last year signed agreements to develop the park, which is expected to house 55 factories and create some 15,000 jobs.
State minister for Investments and Privatisation Evelyn Anite, in a recent interview, said “they (Chinese) mean well, and come here ready to invest but it is us who frustrate them most times.”
“But this one (industrial parks) is a game changer whichever way you look at it, it is the key to Uganda’s industrialisation, and we are ready to work with them tirelessly,” Ms Anite told this newspaper.
Industrial parks or special economic zones is China’s industrialisation model that Beijing hopes to spread to other countries. They are developed with enabling infrastructure such as roads, electricity and water access, available for would-be manufacturers.
In 2007, President Museveni directed the Finance ministry to develop industrial parks across the country in Arua, Lira, Gulu, Soroti, Moroto, Mbale, Tororo, Iganga, Jinja, Masaka, Luwero-Nakaseke, Nakasongola, Mbarara, Bushenyi, Kabale, Kasese, Fort-Portal, Hoima, Rakai and Mubende districts to promote zonal industrialisation.
The President emphasized agro-processing factories for honey, tomatoes, fruits, coffee, milk, grain milling, and others such as cement manufacturing, and textiles, to be built in the parks as one of the ways of supporting small and medium enterprises.
Made in Uganda by China
Records from UIA, a government agency charged with investment promotions locally and internationally, indicate that currently, there are 21 Chinese companies operating in the parks in Namanve/Kampala Business park, and one in the Luzira business park. Most of the industries are agro-processing.
Asked whether this was in anyway a game changer, Ms Stella Kanyike, the UIA spokesperson, said “the answer is a resounding yes.”
“Chinese investment has contributed significantly to infrastructural development, particularly in the areas of transport, energy and ICT,” Ms Kanyike said.
“There has also been significant investment in Uganda’s priority investment sectors such as mineral beneficiation. China is among the top 3 FDI sources in Uganda,” she said.
Finance minister Matia Kasaija while reading this financial year’s Budget, said they expected economic output to grow by 5.8 per cent, higher than the 3.9 per cent recorded last year, and specifically “the industrial sector expanded by 6.2 per cent compared to 3.4 per cent last financial year due to good performance in construction and agro-processing, and recovery in the mining and quarrying sub-sectors.”
He said they would prioritise competitive industrial development of manufacturing firms to increase productivity through, among others, supporting entrepreneurs in making investments in the manufacture of industrial products, provision of serviced industrial parks, and continued infrastructure development to reduce costs of electricity, allow efficient market access through reliable road and rail infrastructure.
In the long-run, according to the commissioner for external trade in the Trade ministry, Mr Silver Ojakol, the growth in the number of Chinese manufacturers will culminate into “made in Uganda by China” industrialisation approach.
Ms Anite noted that “industrial parks is the only opportunity Uganda has” to breathe life in industrialisation, and particularly “as government works hard to bridge trade deficits” with all global markets.
Look at it this way, Ms Anite said: “If we cannot do it (manufacturing) ourselves why not invite the Chinese— who started a few years ago but look where they are—here to produce for our consumption and even export rather than us always importing.”
Indeed, barely a quarter of the year goes by without President Museveni or his designee touring, commissioning or breaking ground for construction of either an agro-processing, textiles or machinery assembly plant.
In the last three or four years, most of the industries flagged off have either been by Chinese or Indian investors.
Ms Anite admitted “it is true Ugandans have concerns about Chinese manufacturing here” but said “(Ugandans) are instead investing in arcades and malls, which is disturbing. I think we should give them chance.”
Uganda is considered a net-import country, meaning it imports more than it exports. President Museveni has on several occasions voiced concern about the country being able to export goods of only worth $5 billion (Shs18 trillion) and spend on $7 billion (Shs26 trillion) on imports.
The Chinese manufacturing locally for exportation or ‘made in Uganda by China’ is a strategy, Mr Ojakol said is one of the avenue of “bridging the trade imbalance” between Uganda and China.
“They know very well the standards for their home markets unlike Uganda manufacturers. If they started producing here and exporting, it is Uganda that stands to gain,” Mr Ojakol told local manufacturers recently at a meeting organised by the Chinese economic counselor to brief Ugandan business people on the China Import and Export fair slated for October.
China is Uganda’s second-largest trading partner but the latter’s exports stand at a meagre $57.7m (Shs214 billion) and imports at $886.2m Shs3.2trillion).
Overall, agriculture accounts for 80 per cent of Uganda’s exports. The industrial sector, especially manufacturing, plays a limited role in the economy.
Mr Ojakol said Ugandan manufacturers are mainly disadvantaged to access foreign “by standards.”
The remedy, he said, is to focus on import substitution and promote exports. More so, as government is increasingly promoting the ‘Buy Uganda Build Uganda (BUBU)’ policy going by the 35 per cent and 60 per cent import duty slapped on imported products that Uganda can otherwise produce.
The proposal for BUBU legislation would, if implemented, offer domestic producers preferential treatment on the domestic market over our EAC partners, for example, through preferential public procurements policies.
Domestic producers would include foreign investors manufacturing locally. The Namunkekera Rural Industrial Centre in Kapeka was commissioned early this year, and during a recent visit officials said it has created some 1,000 jobs across the value chain. So far Chinese investors have set up a fruit processing, food processing and ceramics industries in the park and they are already exporting. Managers at the park said more jobs will be created with time as the factories increase production capacity for both local consumption and export.
Just mid last month, the Uganda-China Guangdong free zone was commissioned in Tororo District near the Uganda-Kenya border. The free zone is home to $620m (Shs2.2 trillion) Osukuru carbonatite complex, which will house fertiliser and steel manufacturing plants to produce for local consumption and export.
To exhibit his commitment to the project, President Museveni, days after the commissioning, ordered for suspension of Uganda Revenue Authority (URA) officials for reportedly “frustrating” the Chinese officials developing the free zone by refusing to clear their machinery at customs.
Can the strategy energise Uganda’s quest to industrialise?
This year’s national budget was specifically premised on “industrialisation and productivity enhancement.”
Since 2000, the government has been emphasising industrialisation to transform Uganda’s economy from peasantry to an industrial-based economy but little has been achieved.
In 2008, the National Industrial Policy was rolled out with objectives of creating a business friendly environment for private sector-led industrialisation, improving infrastructure development for effective and efficient industrialisation programme, and encouraging and fostering innovation, entrepreneurship, adjustment and adoption of best management practices in the quest for improved competitiveness.
However, policy analyst Ramathan Ggoobi in a 2017 study titled, “Economic Development and Industrial Policy in Uganda” argued that the industrial policy is widely (mis)understood to mean industrialisation.
“To be clear, Industrial policy is not about industry per se. Policies targeted at non-traditional agriculture or services qualify as much as incentives for manufacturing.”
Additionally, the policy, since being operationalised, has not been implemented well. Uganda’s industrial sector has been mainly beset by low investments, and poor infrastructure services resulting in high production costs.
GDP growth
A 2017 report titled “An abc of Industrialisation in Uganda: Achievements, Challenges and Bottlenecks” by the UN Economic Commission of Africa notes that between 2000 and 2014, the manufacturing’s sector contribution to GDP growth amounted to just 8 per cent, compared to 30 per cent related to other activities.
“Firstly, the sector is dominated by small and medium enterprises (SMEs), which make up some 93.5 per cent of firms operating in the sector. This in itself represents a serious challenge. Firms are usually not able to reap the benefits of economies of scale and, given the strong correlation between firm size and export capacity, consequently have difficulties competing internationally,” the report reads in part.
In terms of overall contribution of structural transformation, UNECA said in Uganda the absolute contribution was significantly lower at 1.4 per cent but nonetheless ranked Uganda in the top 5 in Africa.
Nevertheless, the executive director of Uganda Manufacturing Association (UMA), Mr Daniel Birungi, said they welcome government’s interventions, including attracting Chinese manufacturers to produce locally but what they detest is the absence of a level playing field.
“It is discouraging to see that many are given preferential treatment on tax incentives, land, etc, on arrival even where it is not necessary yet we are all affected by the same conditions,” Mr Birungi said.
Besides, he added, “when the going gets tough for a local investor they will persevere but foreign investors pack and leave to look for better environment. That is why you see that a lot has been done yet cannot be qualified quantitatively.”
Going forward, Mr Birungi said, with the Chinese investing heavily “it would be ideal if they procure everything locally from raw materials because it widens the value chain.” He also suggested government emphasising joint ventures to transfer capital, knowledge and skills transfer, if the ongoing efforts are to yield results.
What should Uganda produce?
The African Development Bank in a 2011 study said “the desirable structure of African production is a matter of some controversy; but argued they should follow a land-abundant development path similar to that followed by the United States, rather than the model followed by the land-scarce Asian economies—particularly China.
Likewise, a 2014 study titled “China’s Industrialisation: Overview—Implications for Africa’s Industrialisation” by Prof Li Xiaoyun of China Agricultural University in Beijing, said China‘s industrialisation success carries many experiences, such as how to grasp the opportunities provided by globalisation, how to develop infrastructure to eliminate the bottleneck for industrialisation, how to develop industrial parks to absorb foreign capital and technology, etc.
“Certainly, Africa cannot follow China‘s industrialisation path, but there is a lot that Africa can learn from the Chinese experience. The essence of China‘s industrialisation success has been largely driven by the state-led industry policy, i.e. to use the role of the state to eliminate barriers at each stage of development so that the country‘s comparative advantage can be utilised.”
Q& A with Ms Zhao Xiufen, the economic and commercial counselor at the Chinese Embassy in Uganda
How would you describe the China-Uganda economic relations?
Since establishment of diplomatic relations, the economic relations have been deeply enhanced. Now China has become the second largest trading partner, the biggest foreign direct investment source and the key infrastructure partner.
How have relations fared overtime in statistical terms and what, in your view, are the main hurdles?
The friendly exchanges between the two countries date back a long time. People from the two countries have supported each other in the pursuit of development and national renewal. Today, China-Uganda relation are on a fast track of all-round development.
Uganda’s ministry of Trade has always talked of a wide trade deficit; what is the current status in terms of statistics and in your view how can this be bridged?
We need to take a comprehensive view of the development of our economic ties. China was the second largest trading partner of Uganda. To deal with these problems, China will hold the first China international import expo in Shanghai on November. It is a good opportunity for Uganda to narrow the trade imbalance.
One of the ways suggested is getting Chinese manufacturers to produce here for export. How feasible is this idea?
It is a good idea. Chinese government also make a policy of cooperation on international production capacity. In fact, there are several industrial parks funded by Chinese investors in Uganda. Some factories has already started production, and some goods will export to China Market.
How many Chinese businesses do we have in Uganda?
Chinese businesses cover a lot of sectors in Uganda such as manufacturing, agriculture, construction, electricity, financial, mining, storage, and wholesale.
How many of these are in manufacturing?
About 60 per cent, according to UIA.
During the last FOCAC summit, a lot was premised on manufacturing but has anything tangible been achieved yet, especially on Uganda’s side?
We have the launch of Liaoshen Industrial Park and China-Uganda Mbale Industrial Parks. Chinese enterprises also constructed the Karuma Hydropower Station, Isimba Hydropower Station, Kampala-Entebbe Expressway and Entebbe Airport expansion project. Those projects will further improve the business environment in Uganda, and attract more investment on manufacture sector in the future.
Through what other initiatives does China plan to grow manufacturing in Africa, and in Uganda?
President Xi Jinping has put forward the initiative of the Silk Road Economic Belt, and the 21st Century Maritime Silk Road. The initiative aims to strengthen international cooperation and synergize national development strategies for greater complementarity and common development. It is an opportunity for China-Africa, and China-Uganda to enhance infrastructure and manufacture cooperation under this initiative.
This work was produced as a result of a grant provided by the China-Africa Reporting Project managed by the Journalism Department of the University of the Witwatersrand.
Uganda: Made in Uganda By China
By Julius Businge 22 SEPTEMBER 2014
https://allafrica.com/stories/201409230351.html
Chinese officials from the China Communication Construction Company Limited at the launch of the construction of Kampala-Entebbe Express High Way in November, 2012. INDEPENDENT JIMMY SIYAExperts optimistic that Chinese investments good for job creation, cheaper infrastructure and technology transfer
Last month, two groups of Chinese investors made a business trip to Uganda in what analysts see as an attempt to make a big mark on the country's economic landscape. Led by its CEO Yuegong Wang, officials of the Sichuan Wande Group met Prime Minister Amama Mbabazi whom they asked to assist them acquire a 10-square-kilometer (3.86-square-mile) chunk of land to establish an industrial zone to which they would attract Chinese manufacturers to add value to Ugandan raw materials, ranging from agricultural products to minerals.
倍可亲首页 新闻中心› 国际观察› 正文
“中国人满怀好意来，结果因为我们，屡屡受挫”
京港台：2018-9-7 18:10| 来源：观察者网
https://www.backchina.com/news/2018/09/07/581604.html
在和中国的合作中，乌干达曾有过一段“叛逆期”。但是面对国内贸易结构失衡、制造业持续萎靡等问题，急于“向工业转型”的乌干达越发觉得，中国才是他们的“救命稻草”。
“中国人满怀好意来，结果因为我们，曾屡屡受挫”
乌干达《箴言报》5日发表题为《中国在乌干达产业领域的足迹》的文章，介绍了中乌两国合资的农业生产园项目。该农业园主要经营水稻种植、畜牧养殖及农副产品加工等产业为主。
同时，为推动乌干达工业化，中乌两国还正在距坎帕拉220公里的姆巴莱市，合资建设工业产业园——预计将容纳55个工厂并创造1.5万个就业机会。官员们说，不久还将在此开设一个汽车组装工厂。
2018年3月9日，中乌工业产业园启动建设 图自新华网微信公众号新华非洲
“说实话，我们曾对中国制造商们有过顾虑。”乌干达投资与私有化国务部长阿妮特（Evelyn Anite）承认，“他们好心好意地来，结果正是因为我们，他们曾屡屡受挫。”
阿尼特表示，当时虽有机会在中企的帮助下发展本国制造业，“但乌干达却宁愿去兴建很多商铺、商场。这很让人头疼。”
自2007年起，乌干达总统穆塞韦尼计划修建多个工业产业园。但乌干达《商业关注报》则指出，最初乌方并没有很欢迎中企入驻，而是“借鉴西方发展模式”。
无独有偶，乌干达《新晨报》曾在2013年撰文，“非洲接受西方的发展模式，但显然没能因此走向成功。”
文章旨在解开乌干达人“黑猫白猫”的困惑：西方民主未必就是发展的引擎；发达国家虽然不完全认同“中国模式”，但它们仍争当中国的贸易伙伴；非洲必须向中国学习。
乌干达想要什么，为什么自己得不到？
乌干达多年来存在“出口远小于进口”的贸易失衡问题。总统穆塞韦尼数次忧虑地表示，国家只能出口50亿美元，却花掉70亿用于进口。
穆塞韦尼 图自箴言报
实际上从2000年，乌干达就想扭转这种局势。但由于农业生产落后，工业制造业持续萎靡，无法迈出转型的第一步：截止去年，该国所有连锁超市中的商品，60%都是进口；2017年该国出口商品总额28.5亿美元，依然不足进口总额的48.1亿美元。
比如，《商业关注报》曾介绍道，“虽然我们农业优势相对（相比工业）明显，但必须每年向南非进口桔子和番茄。为什么？因为我们有时候会遇上粮食减产，有时候大丰收，但因我们收割技术落后，产量依然很低。”
而在制造业方面，“投资不足”、“基建落后”等问题导致“生产成本高昂”：2000年至2014年间，该国制造业对GDP的贡献只有8%，目前该国80%的出口仍以农产品为主。
最致命的是，乌干达本国就制造业迟迟拿不出一个合适的标准。一位业内人士曾在2017年的一场会议上告诫同行：如果以乌干达国家标准局（UNBS）的标准来生产产品，“我们连国门都走不出去。”
“made in Uganda by China”(中国创造的乌干达制造）
“如果我们干不了制造业，为什么不请中国人来帮忙？”阿妮特说道，“人家接触制造业也不是很久，现在看看他们（中国）的成就吧。有他们生产补足国内的消费，说不定我们的出口短板也能补上。”
乌干达贸工部外贸司司长奥杰卡（Silver Ojakol）也认同，“不同于咱们的制造商，中国人就知道如何把握生产的标准。如果他们选择在此生产、出口，乌干达必定受益。”
奥杰卡 图自商业关注报
《箴言报》介绍道，自2013年至今，已有22家中企入驻乌干达农业和工业产业园。而上文提到的中乌两国合资的农业生产园，“已经开始有产出”，“部分产品已经出口海外”。
被问及这是不是个变局性改革，乌干达投资局发言人斯泰拉·卡妮克（Stella Kanyike）说，“那当然了，中国投资已大大促进乌干达的基础设施发展，特别是在交通、能源和信息通信领域。”
卡妮克表示，乌干达政府近年来已经兴建多个产业园，但“和中国合资的这个（指中乌工业产业园）才是重头戏，有了它，我们就能翻身（gamechanger）。”
乌干达政府将这个模式成为“中国创造的乌干达制造（made in Uganda by China）”，示意乌干达的制造业是建立在中国制造业的基础之上。
2017年，该国又开始推行“买乌干达，造乌干达（Buy Uganda Build Uganda）”倡议。该倡议具备一定的保护主义，将对“本国能生产”的进口商品征收比例不等的关税。
乌总统：与有些西方国家习惯于对非洲颐指气使不同，中国对非洲国家从来都是平等相待
中国和乌干达友谊深厚。但近年来也有媒体“心怀鬼胎”，故意“挑破离间”。
去年的“象牙事件”就是一个比较有代表性的例子。2017年5月，有法新社在内的西方媒体无端炒作“乌干达就象牙走私调查中国外交官”、“中国官员走私象牙受乌干达调查”等。结果，经过乌干达当局的调查，此事被证明是彻头彻尾的一出“乌龙戏”。
两国的合作也将得到进一步的深化。
继南非的约翰内斯堡后，两国领导人昨天（6日）又在中菲合作论坛上会面。国家主席习近平(专题)强调，乌干达总统穆塞韦尼是中非合作的长期推动者和参与者，对中非合作论坛建设作出了重要贡献。
9月6日，国家主席习近平在北京人民大会堂会见乌干达总统穆塞韦尼。 新华社记者燕雁摄
穆塞韦尼回应：非洲人民不会忘记中国人民的深情厚谊。乌方愿同中方深化交通运输、工业园区、电力、人力资源等领域合作，密切双方在国际事务中沟通协作。
和习主席见面的前，穆塞韦尼还于3日在《人民日报》上发表署名文章。
“乌中两国政治互信根深蒂固、不可动摇。在经济方面，乌中合作成果显著。中国帮助乌干达修建了恩德培国际机场扩建项目、卡鲁马水电站、伊森巴大坝、国家体育场、工业回收中心等。”
“与有些西方国家习惯于对非洲颐指气使不同，中国对非洲国家从来都是平等相待，尤其是在合作促进双方共同发展方面。以中国公司承建的坎帕拉至恩德培高速公路为例，它将乌首都与恩德培国际机场连接起来，成为乌干达通往世界的纽带。”
