China plans to deepen influence in Uganda with digital projects

However, the trade volumes between the two countries are in favour of the Asian nation

Kampala, Uganda | ISAAC KHISA | China plans to deepen its influence in Uganda with the implementation of the China-Africa Digital Innovation initiative alongside other pledges in investment, trade and access to coronavirus vaccines.

Chinese Ambassador, Zhang Lizhong, during a virtual media briefing in Kampala on Nov.23, a head of the two-day Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in Dakar, Senegal, which starts on Monday said the initiative aims to promote cooperation in digital economy, digital infrastructure, digital education, digital inclusiveness and digital security.

“We need to encourage private companies to play bigger role through policy coordination and upgrade the cooperation on industrialization parks and other sectors,” he said.

“Private companies are big in numbers and the backbone of direct investment to Africa countries. (And) the Dakar Conference will provide new opportunities for private companies to expand cooperation in Africa.”

Lizhong said there’s need for the two countries to identify key areas of cooperation which among others could include; poverty reduction, food security, COVID-19 response and vaccines, investment and trade, industrialization, connectivity, climate changes, digital innovation and human resources.

China’s digital economy has expanded rapidly in recent years, with the latest statistics by the China Academy of Information and Communications Technology, indicating that in 2020, the country’s digital economy achieved a high growth rate of 9.7% amidst the pandemic and global economic downturn, with the scale of US$6.1 trillion).

However, Uganda’s digital economy, remains low though it is showing signs of rapid growth. Latest study carried out by Inclusive Digital Economy Scorecard, (IDES-Uganda) shows that only 26% of Ugandans are included in the digital economy and the rest are largely left out of the digital-aided services and economic activities.

China has over the past two decades invested billions of dollars in Uganda especially in infrastructure developments such as the construction of the Karuma Hydropower Plant, Isimba Hydropower Plant, Kampala-Entebbe Expressway and the expansion of the Entebbe International Airport.

China-Africa trade

Trade between China and Africa and China’s investment in Africa have expanded by 20-fold and 100-fold, respectively, during the same period.  China has built and is building in Africa more than 10,000 kilometers of railway lines, nearly 10,000 kilometers of roads, 120,000 megawatt of power-generating capacity, 150 kilometers of backbone network lines, over 400 medical facilities, 1200-plus educational institution, and 400,000 tons of annual clean water treatment capacity, creating over 4.5 million employment opportunities in Africa, according to the Chinese Embassy in Kampala.

During the first  nine months of 2021, China’s direct investment to Africa across all sectors registered a US$2.59 billion, an increase of 9.9% year on year, outpacing  China’s overall outbound direct investment by 3% and exceeded the pre-pandemic level in 2019.

But while trade volumes between China and Uganda been in on an upward trajectory, Uganda’s exports to the Asian nation has remained remarkably low. For instance, statistics from the Bank of Uganda shows that the country’s exports to the China consisting mainly of unprocessed agricultural products has increased from US$0.28million in 2000 to US$40million in 2020.

On the other hand, the value of China’s exports to Uganda has increased from US$31.4million to US$ 1,094.78million consisting mainly of industrial machinery and construction during the same period under review.

However, Lizhong said China welcomes the exports of Uganda’s products into the Chinese market, fully utilizing the 97% products tariff-free treatment granted by China to expand its exports.

“We also encourage Uganda to take an active part in the China International Import Expo, the China-Africa Economic and Trade Expo and other Expos activities so as to promote Ugandan’s products,” he said.