Chinese investment helps Uganda drive industrialization, modernization

Published: May 29,2024

As dawn breaks, Hellen Mugala, 27, joins hundreds of her colleagues on their way to work at the Sino-Uganda Mbale Industrial Park, located in the eastern Ugandan district of Mbale.

“This industrial park has helped many local people. I have acquired skills and earned a living from the Chinese company,” Mugala said.

According to park authorities, about 5,000 young people pass through the park gates daily, heading to various factories. The industrial park, one of the largest in the country, is home to more than 40 companies that manufacture a range of products, including smartphones, televisions, textiles and steel.

Small businesses and neighboring villages are also reaping benefits from the influx of employees. Charles Nyeko, a resident of Doko village, said his community has been transformed as the population has grown from 2,000 to about 4,000, most of them workers at the industrial park. Since opening a small shop in the village, Nyeko’s life “has become better and better.”

By the end of 2022, in terms of foreign direct investment (FDI) alone, Chinese enterprises had invested over 692 million U.S. dollars in Uganda, according to the Chinese embassy. In 2023, China’s FDI in Uganda reached 55.7 million dollars. These investments, mainly channeled through the China-proposed Belt and Road Initiative, have created tens of thousands of local jobs.

Ugandan officials said this exponential investment is catalyzing the country’s industrialization and the ultimate goal of modernization. David Bahati, Uganda’s minister of state for trade, industry and cooperatives, told Xinhua that China, an important cooperation partner of Uganda, has been providing capital as well as sharing skills and technology to develop energy and transport infrastructure, which are key drivers of industrialization.

“The development of the Sino-Uganda MbaleIndustrial Park is doing wonders. We have seen the FDI coming through the industrial park, helping us in terms of import substitution. Most of the things we were importing, such as televisions and clothes, are all being produced at the park,” Bahati said.

He also noted that China is financing the expansion of Entebbe International Airport, the East African country’s main gateway to the world. “As infrastructure grows, it helps with marketing and trade within Uganda and outside Uganda. So China is playing an important role in improving household incomes.”

Evelyn Anite, Uganda’s state minister of finance for investment and privatization, said the China National Offshore Oil Corporation, operating in the Kingfisher Oil Field, will also drive the development of the country’s petrochemical industry.

Uganda has discovered 6.5 billion barrels of oil in the western region, of which 1.4 billion barrels are commercially viable, according to Uganda’s Ministry of Energy and Mineral Development. Economic analysts and the Bank of Uganda have predicted that the oil sector will significantly accelerate Uganda’s economic development, contributing to 30 percent of the country’s gross domestic product.

“We are going to see the manufacturing of petrochemical products with the help of Chinese investment. It will reduce our import bill and increase our export earnings,” Anite said. 

Xinhua