Countering China: U.S. Top Official Meets Museveni on Investment

President Museveni has held bilateral discussions with the new American Deputy Secretary for East Africa, Ms James Makila on boosting bilateral trade and investment.

The development comes hardly a fortnight after U.S. top officials rolled out President Donald Trump’s ambitious plan to counter China’s aggressive investment policies in Africa including Uganda.

The meeting place Tuesday at State House Entebbe.

State House said the President and his guest discussed how “Uganda and the United States of America can work together to increase and promote investment and infrastructure development in Uganda.”

In October this year, Trump signed a US$60 billion Better Utilization of Investment Leading to Development (BUILD) Act to promote American corporate investment in Africa.

Ambassador Makila said Uganda has a lot of opportunities that the United States of America would be interested in partnering in sectors such as security and health particularly fighting the Ebola pandemic, among others.

“We want to work with countries that have a vision for Africa’s growth and understand what is needed for American companies to invest. We want Uganda to be less dependent on foreign aid,” she said.

U.S. National Security Advisor Ambassador John Bolton recently characterized China’s policies toward Africa as rapacious and neo-colonial, expressing concern that China would use its leverage over states heavily indebted to it in return for a monopolistic hold on the continent’s natural resource bounty.


Bolton said the objective of U.S development assistance will be to foster “mutually beneficial” economic relations and support the “economic independence” of African states.

To accomplish this, the U.S. government will involve greater participation from the private sector via the soon-to-be launched International Development Finance Corporation, whose $60 billion budget will support traditional development assistance programs.

The Ministry of Finance recently said the value of disbursed and outstanding loans from China to Uganda grew to Shs6 trillion ($1.6b) as of March 2018 up from Shs4.12 trillion ($1.10b) in 2016, accounting for 21.8 per cent of Uganda’s total external debt.

China through its EXIM Bank committed $350 million for Entebbe-Kampala Expressway, $100 million to improve road networks, $483 million for Isimba hydropower plant and $1.4 billion for Karuma Dam, among others in the said period.

China alone has a loan commitment totaling to US$ 2,588,078,279.  Over, the last four years, Uganda has seen an increasing share of Chinese loans in roads and energy projects in excess of USD 3bn.

According to Richard Ssempala, Research Associate Uganda Debt Network, these loans are to be paid in a short period of time averagely 10 years yet they are invested in long term projects.

“This implies that if Uganda doesn’t comply with the debt obligations to the later, the country is likely to undergo debt distress in the near future, given the fall in GDP growth from 7.3 percent between 2000 and 2010, to an average of about 5 percent, low foreign earnings, unstable exchange rates  among other macro-economic constraints,” said Ssempala.

Museveni speaks out

President Museveni said government was already dealing with bottlenecks such as high cost of transport and electricity so as to attract more investors to the country that would in return help to address issues such as youth unemployment.

“It is important for the state to address some issues such as the cost of electricity, transport and cost of capital so that the cost of production is low. Once we deal with those, more investors will be attracted to invest in Uganda,” he said.

President Museveni called upon the World Bank and the International Monetary Fund to promote private sector led growth.

“Governance and rule of law are software parts of development but there is need to address hardware issues like low cost of power and electricity. Software alone is not sustainable,” he stressed.

The President and Ms. Makila later discussed regional issues mainly the security situation.

Ambassador Makila said that the US was grateful for Uganda’s contribution towards the African Mission to Somalia (AMISOM).

“We are grateful for your contribution and value our security partnership,” she said.

President Museveni said there was need to build institutions, such as the Army, so that Somalia would address the institutional vacuum.

Ms. Makila also commended the President, his government and the people of Uganda for their hospitality towards the refugees.

“You are doing an impressive job,” she noted.

State Minister for Regional Affairs, Hon. Philemon Mateke, the US Ambassador to Uganda Ms. Deborah Malac and Ms. Kim Harrington the Head of Political and Economic Sector at the US Mission to Uganda, attended the meeting.

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