By Julius Kapwepwe Mishambi
Published: 13th January 2016
1) China Railway Corporation and Globalisation
Compared to countries in Europe, America and elsewhere, China has globally demonstrated affordable, yet reliable, railway infrastructural technology. Turkish high speed railway network commissioned in July 2014 and similar undertakings within China attest to this. China already scooped mega lucrative projects like the $14.2 billion double-track 1,435mm East African Community Standard Gauge Railway (SGR) system: Mombasa port through Kenya, Uganda, Burundi, Rwanda and South Sudan, for 120 km/h as passengers and 80-100 km/h goods trains. Some sections by Chinese Harbour Engineering Company (CHEC) may be complete in 2018, with Uganda’s initial cost of $3.3billion.
Others include Ethiopia and high speed railway projects in Myanmar, U.S (Los Angeles to Las Vegas), Russia, Montenegro and United Kingdom. Here, Chinese companies and financial-related institutions (e.g. Export and Imperial Bank of China-EXIM and BRICS Bank) are increasingly the favoured contractors, financiers, suppliers of equipment/ technology and human power (www.globalconstructionreview.com/news/china ).
2) China in Africa beyond railways
Beyond railways, Chinese firms are designing, developing and maintaining roads, aviation, ports, military installations and equipment. Others are hydropower dams, water transport and attendant infrastructure. The cost is, of course, borne by recipient nations or enterprises. Over 2,500 Chinese companies have already invested in Africa.
3) 6th Forum on China-Africa Cooperation (FOCAC) and take away
As 15 African Presidents joined the Chinese President Xi Jinping for the 6th Forum on China-Africa Cooperation (FOCAC) during December 2015 in South Africa, Chinese Railway Corporation engaged twenty countries, mainly from Eastern Europe, over high speed railway projects. The struggle to improve infrastructure globally to kick-start or enhance economic development is on. African infrastructural deficit alone stands at $90 billion annually. All these realities are amidst Chinese economic appetite to get back to a decade-old average economic growth rate of at least 8%.
The above partly informed the Chinese President’s announcing during 2015 FOCAC, a $60 billion package- due 2015-2018 across selected African nations. Most Chinese debt repayment has been based on commodity modalities linked to Africa’s extractive industry. From 2015 FOCAC, South Africa parted with $6.5 billion, EAC $2.7 billion ($1.5 billion to Kenya and even with an outstanding $1.3 billion Chinese debt; then $1.2 billion to Uganda). Ironically, South Africa and other nations that attracted biggest packages are the most indebted to China, while Kenya is leading in EAC.
4) More questions on Debt contraction, Transparency and Absorption capacities
Africa’s debt to China so far staggers at over $30 billion. Even with zero-interest on selected existing loans and concessional terms in some new cases, it points to further Africa’s dependency on China. So, are African resources being mortgaged, e.g. oil resources and discoveries in Kenya and Uganda? Where is Parliament; and other due process for stakeholders’ involvement- for wider transparency in such packages? How do we minimise low loan absorption issues as already presented by Auditor Generals?
5) Case of China and Standard Gauge Railway (SGR) in Uganda
SGR project in Uganda already suffered allegations of procurement malpractices and inflated cost, with a Parliamentary report and MPs ask court to block the project (e.g. Daily Monitor 6th July 2015, page 5). Such seems an African narrative involving Chinese companies. How do we rebuild citizens’ trust in public sector procurement and management? Or even debt that contributes to desired African economic outcomes? Amidst such, how do we position Uganda to benefit from China’s globally proven affordable railway construction and management technology?
6) Which way?
Now with resources from 2015 FOCAC to Uganda’s infrastructural projects, let’s support President Museveni particularly to deliver SGR. Its success cuts across traders, industrialists and agriculturalists. Uganda Revenue Authority will increase revenue collection by undercutting corruption scale at weigh-bridges on roads. Let’s meaningfully learn from Chinese global successes and also meet our EAC and African targets. Even at 80-100 km/h, railway remains the fastest means in goods haulage. Timely SGR project delivery contribute to Uganda’s Vision 2040 of transforming from low income of $686 (IMF, 2014) to $9,500 per capita by 2040; as well as EAC and the wider African development paradigm.
The writer is the Director of Programmes at Uganda Debt Network