Banks fight over Chinese businesses

Mutual benefit?

Stanbic’s Regional Economist, Jibran Qureishi, also told The Independent on the sidelines of the economic forum that the relationship for the two countries –Uganda and China– is mutually beneficial at the moment.

He said that China is helping Uganda with concessional loans at a time when commercial loans are expensive.

“Their loans, once invested in the right place will help Uganda to industrialise and create opportunities for the people,” he said.

He said the wider trading gap between Uganda and China is a reflection of a fact that Uganda does not have the capacity to produce what it needs.

“If you look at what Uganda is importing, they are raw materials that are supplementing the growth of the manufacturing sector which is a long term positive for the industrialisation ambition of the country,” he said.

Qureishi said it is not Uganda alone. Many African countries are importing a lot of equipment and other raw materials for manufacturing because they do not have enough capacity to produce.

“But the bigger picture has to be seen as to where those imports are going,” he said, adding  if you import raw materials and use them for the right things, then it is possible that you would become self-sufficient and grow your economy in all aspects.

He said that Uganda needs to maintain a robust investment climate to attract more investors in the manufacturing sector and other potential sectors as a quick way of creating jobs, widening tax base and boosting GDP numbers.

He says government needs to invest in education, train semi-skilled labor, bring down the cost of doing business – by not only investing in power generation but also in power transmission, doing lots of work on roads, ports, rehabilitation of airports which will ultimately make the industrial base of Uganda competitive.

Some of the lessons to learn from China according to Qureishi relate to how they have strategically managed their economy.

“They showed us over the last two decades that boosting savings, investing heavily in infrastructure and growing your manufacturing base are critical in bolstering economic growth,” he said, “Africa and Uganda in particular should do the same.”

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editor@independent.co.ug