China’s geopolitics: Is it a win-win or win-lose game?

Ms Ahairwe is an MA Economics graduate from the University of Botswana.

What you need to know:

Need to train citizens. Foreign experts should be contracted on condition that they train and equip citizens with comprehensive skills, relevant knowledge and required techniques that could be applied on future similar projects. The trained Ugandan labour will cheaply take on the future projects, which will reduce government expenditure, enable debt repayment, etc.

Need to train citizens. Foreign experts should be contracted on condition that they train and equip citizens with comprehensive skills, relevant knowledge and required techniques that could be applied on future similar projects. The trained Ugandan labour will cheaply take on the future projects, which will reduce government expenditure, enable debt repayment, etc.

Early September this year, 53 African heads of state and the Chairperson of the African Union Commission met in Beijing, China to sign the China-African Cooperation, whose ultimate goal is a win-win liaison. Notably, only Swaziland rejected to be a part of this partnership on grounds of maintaining her alliance with Taiwan.

The deepening China-Africa ties have upshot various controversial opinions and findings on the role of China in Africa’s development. Some of these greatly stress that China could be failing Africa on the rationale that the China loans have trapped Africa in debt, the Chinese constructed infrastructure underperforms its costs and Chinese businesses in Africa are looking for survival rather than mutual benefits. It is not clear whether China is playing a zero sum or positive sum game.

Although I cannot underrate the role of China in development of Africa in general, taking a critical analysis of Uganda in particular demonstrates some instances in which China represented by Chinese loans, labour and businesses, has been unfairly cutting the cake. To be specific, China’s Exim Bank previously loaned $350 million to supplement the construction of the Entebbe-Kampala Expressway (EKE) that was commissioned in June 2018.

In addition to this, Uganda had to employ a Chinese company, the China Communications Construction Co. Ltd (CCCC) to do the job as part of the loan agreement. The CCCC contractor is demonstrated to have been the most expensive both in the country’s history and relative to the features of the EKE. Undoubtedly, the CCCC contract cost the country a punitive amount of $476m for the project, ceteris paribus, China took her loan back home and an extra $126m. One could justify that this was the best efficient contractor at hand, but it was not.

Indeed, the Auditor General Report (2015) disclosed that Entebbe-Kampala Expressway cost twice ($9.261m) the price ($4.140m) of a similar project by the same contractor in Ethiopia. The Auditor General further noted that the costs would have been much lower had there been “competitive bidding”. The question is, did China ensure a win-win relation by constructing for us a very expensive road that she had constructed very cheaply elsewhere?

Despite these accountability inefficiencies, Uganda continues to employ various Chinese firms in different infrastructure projects. These include inter alia the China Railway Seventh Group, China Civil Engineering Construction Corporation and the offshore oil and gas Chinese company, CNOOC Ltd, that signed an agreement in September 2018 to take on oil exploration in the country. As these contractors continue to take on various projects, the government should greatly address accountability issues to ensure high value for taxpayers’ money.

Besides, the government should boost her negotiation abilities in the China loan deals. Much as we criticise the Western world loans on grounds that they are “tied loans”, the restricting of a Chinese loan to employment of a Chinese contractor makes the Chinese loan a “tied loan”. Uganda cannot fairly benefit from an infrastructure construction loan provided by China and conditioned on employment of an implausibly expensive Chinese contractor.

For more than a decade, we have always employed Chinese contractors to carry out most of our infrastructure projects. It is about time we stopped running to China every time we need a road or a skyscraper. Why?

According to the Uganda Bureau of Statistics Report of November 2017, about 75 per cent of youth are in vulnerable employment. The Uganda National Household Survey 2016/2017 further reveals that only 8.6 of the youth employed are skilled.
With such kind of poor employment traits, the government should highly negotiate for favourable loan terms that best benefits her citizens. These are loans, not grants. The government should acknowledge that it has to tax Ugandans and their children to pay off all these debts.

Therefore, it should give Ugandans top priority in her debt haggles and give a go to only projects that best benefit Ugandans. Certainly, a project like EKE should not only benefit Uganda by providing her with an expressway, but also employ or develop her human capital.

Foreign experts should be contracted on condition that they train and equip citizens with comprehensive skills, relevant knowledge and required techniques that could be applied on future similar projects. The trained Ugandan labour will cheaply take on the future projects, which will reduce government expenditure, enable debt repayment; hence, win-win China-Uganda relations.

Ms Ahairwe is an MA Economics graduate from the University of Botswana.
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