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Appeasing the Chinese
The current Minister of Trade, Industry, and Cooperatives, Amelia Kyambadde on Jan.05 wrote a letter to the leader of government business, Prime Minister Ruhakana Rugunda, in response to complaints about the government failure to stop the influx of foreigners dealing in wholesaling, retailing and hawking in Kampala, municipalities, and towns.
In the letter that leaked into the public domain, Kyambadde said the influx of foreigners into Uganda has affected business growth and job creation amongst the Ugandan business community especially the youth.
She pointed out that a multi-sectoral technical team of her ministry and other agencies that did research on the issue found that the foreigners are taking advantage of the lacuna in Uganda’s investment code, the citizenship and immigration control laws, and the trade licensing law.
Uganda’s trading guidelines say foreigners are legally free to engage in trade of any kind as long as they fulfill licensing requirements under the trade licensing law.
These requirements include incorporating a company, depositing $100,000 in the Central Bank, getting an entry permit from the Immigration Directorate, and getting a trader’s licence from a local authority.
Earlier, on December 19, 2016, Kyambadde had submitted to Cabinet proposals for actions that needed to manage the situation. At the time, another strike was in the offing when Members of Parliament of the Trade, Tourism and Industry Committee last September made an impromptu visit to the hub of local business— the Kikuubo Lane area— in downtown Kampala.
The MPs issued a three months ultimatum to the foreigners in retail businesses to either invest in bigger projects or voluntarily return to their countries.
This decision followed a petition submitted to parliament by KACITA. But the ultimatum elapsed without action against the foreign traders. Despite the obvious pressure, Kyambadde’s colleagues in cabinet resolved that the status quo remains while the matter was assigned to a Cabinet sub-committee to study and report back for action. Almost half a year later, a Cabinet decision is yet to be taken.
The government’s failure to act appears to be tied to its eagerness to please and placate any Chinese interests in the country.
Most of the appeasement is a result of the government’s dependence on Chinese government capital and technical expertise in the implementation of nearly all the biggest infrastructure projects in the country, including major electric power projects, roads, bridges, and railways.
The Chinese financed and are building the 600MW Karuma and the 183 MW Isimba hydro power dam projects on the River Nile. The Chinese state firm, Synohydro, is doing the construction at Karuma while 85% of the US$1.7 billion for the project was borrowed from China’s state-owned Export-Import Bank.
Another Chinese company, China International Water and Electric Corporation is building the hydroelectricity dam at Isimba.
Another Chinese engineering firm, the China Harbour Engineering Company also won the tender to build the multi-trillion shilling Ugandan section of the standard gauge railway.
Meanwhile, following the April 19 eruption of hostilities against the Chinese traders, Parliament summoned Kyambadde to give an update on how far Cabinet had gone on the issue. But when she gave a report to parliament on April 21, she said her hands are tied. The government does not yet have a legal framework to bar foreign traders dealing in similar products with nationals, she said.
The government failure to act, however, is being exploited by its political opponents. During the latest riots, even as local traders were brandishing banners calling for expulsion of Chinese traders from the country, the populist Lord Mayor of Kampala city, EriasLukwago, joined them with a warning to the government. “The growing tensions,” Lukwago said, “could soon grow into a full blown anti-foreigner movement if the government fails to rein in the Chinese retail traders.”
“We are likely to have xenophobia here,” Lukwago said in an address to the protesters, “That is where we are heading unless they (government) come up with measures to protect indigenous traders.”
in that case , if the government is to stop these chinese from the retail business, then the same government should regulate the price of all commodities being sold. because our local traders, b4 these foreigners opened up shops here, they were really making everything so expensive en a luxury to us all. for example 100usd could only get you a 2nd hand tv. a new one would be 300usd. yet they would buy it at 70usd. in china or india. but now with these stores in town. new things are at a fair price. and let the customers decide. KACITA is one of ur biggest problem u traders. they own the buildings you do business from and they make them so expensive thus increasing ur cost of operation, this group should be bargaining for a fair tax from government on ur behalf, a group of 200,000 traders, you should have ur own bank giving you loans at a reasonable interest rates, if you stop getting money from those other banks, they’ll come back to their senses en reduce theirs too. all you need is a really nice organised KACITA to give you a fair competition aganist the chinese. no ugandan would buy from a chinese if you are all selling at the same price. you should also make groups and buy in bulk as a group at a cheaper price rathed than coming one by one to buy things from china at a higher price. just get organised en compete.