China helps unlock Uganda's economic potential through infrastructure debt

English>>Foreign Affairs

Editor's Pick

China helps unlock Uganda's economic potential through infrastructure debt

(Xinhua) 19:04, November 05, 2013

Email|Print|Comments

twitter

facebook

Sina Microblog

This year has seen China pour huge financial resources in Uganda to help the East African country fast track its economic development.

Deep in rural Uganda, it is common to see Chinese engineers with their heavy earth moving equipment dig up roads or preparing to construct huge hydro power plants.

Far from the oil resource and trade, China is now targeting transport and energy infrastructure which according to economic experts are major bottlenecks to unlocking Uganda's economic potential.

In the outskirts of the capital Kampala, Chinese engineers are working with their local counterparts day and night to finish the construction of the country's first ever Expressway linking the capital Kampala to Entebbe International Airport, the country's main gateway to the rest of the world.

Using loans of 350 million U.S. dollars from China's Export and Import Bank, Uganda anticipates that the four carriage 37-km road will open new opportunities to the country striving to become a middle income country within the next decade.

According to the Chinese embassy in Uganda, the construction money is one of the biggest single soft loans that China has ever given to Uganda.

Construction of another major road linking the western Ugandan town of Fort Portal to Ntoroko, Bundibugyo and the Uganda-eastern Democratic Republic of Congo (DRC) border is near completion. The contractor Chongqing International Construction Corporation (CICO) said construction will be completed by the end of this year.

The Chinese constructed road with money from the Africa Development Bank traverses land with high potential for agricultural production and tourism.

The upgrading of the road to bitumen standard is considered to be important, not only in terms of completing the national paved road circuit, but also for international transit traffic to the DRC, in addition to providing another important access to Uganda's section of the great western rift valley.

"The visitors here will increase in number because some years ago this was a hard-to-reach area. It would take more than 10 hours to reach this site. Now that the road is good, it is now about one hour's drive from Fort Portal to here," said a tour guide at Semiliki National Park where the 103.6-km road traverse to the eastern DRC border.

These two roads are among the hosts of roads that are being constructed by Chinese firms. Apart from long term benefits of the roads to the country, the locals who participate in the construction have gained skills from their Chinese counterparts.

"Through training we have taught these people how to work. We are happy because a lot of people have improved. I hope Uganda and Chinese corporation will improve," said Yuliang Yu, CICO engineer.

Moving from the road sector, Chinese are also vying for the reconstruction of the country's railway system. Uganda relies on a dilapidated railway line to ferry some of its products from and to the Kenyan sea port of Mombasa. The proposed reconstruction of the railway will create a network linking Rwanda, Uganda, and South Sudan to Mombasa. The internal transport network would also be improved.

China or Chinese companies are venturing into construction of hydro power dams, another crucial sector in the economic development of a country.

Uganda lacks adequate electricity which forces manufacturers to rely on the expensive thermal generated electricity that pushes up the costs of production.

"Ever since 1986, the Ugandan economy has been growing at the rate of 6.5 percent per annum. The economy could have grown at a much faster rate if we had the capacity to address all the strategic bottlenecks such as electricity," Ugandan President Yoweri Museveni said on Aug. 12 while commissioning the construction of the 600MW Karuma Hydro Power Plant.

"Unfortunately, at that time, we did not have our own money and our partners from outside tended to put frivolous points ahead of the substantive needs of developing infrastructure," he said.

"Our Chinese friends also have, not only the technical capacity, but financial capacity as well on favorable terms. Chinese lending is also completely free of the usual meddling and high-handedness of some of the friends from outside. They also focus on the primary sectors of the economy such as infrastructure instead of focusing on secondary sectors of national life," he said.

Construction of Karuma Hydro Power dam was awarded to Sinohydro Corporation, a Chinese state owned firm.

"We will bring our advanced technology and standard to this project. We assure the local people and government that the dam will be safe," Duan Xiaoping who represented Sinohydro Corporation, at the commissioning of the construction of the power plant.

"This project is very important to this country. It is the biggest one in East Africa and we know that Uganda will have enough electricity."

Chinese firms are constructing several other hydro power dams in Uganda.

Uganda's Prime Minister Amama Mbabazi in a recent meeting with a visiting Chinese delegation described China's support to infrastructural development as crucial in fast tracking economic development.

"Infrastructure is indeed vital for an improved investment climate and better livelihoods for the citizenry. Numerous roads, expressways, flyovers, railways, ports, hydropower stations and backbone fiber-optic networks are examples," Mbabazi said on Sept. 17 while meeting a Chinese delegation led by the chairman of the standing committee of the National People's Congress of China, Zhang Dejiang.

"The Chinese drive in supporting infrastructural development in Africa is mutually beneficial and should be consolidated," Mbabazi added.