The awarding of several infrastructure projects to Chinese contractors has seen China overtake India as Uganda’s top country for imports.
The 2016 statistics from Bank of Uganda (BoU) indicate that Uganda imported goods worth $720.9m (Shs2.6 trillion) from China compared to $686.4m (Shs2.5 trillion) from India.
There were declines in imports from both countries compared to 2015 with the sharpest decline being from India at 31 per cent.
Chinese imports declined by only 2.1 per cent.
This is because the plant, machinery and vehicles for several road projects were imported, even as the import market underperformed.
“The fewer declines in imports from China are not necessarily a substitution of the source of imports. It has more to do with the fact that most of the infrastructure projects currently under way are being undertaken by either Chinese firms or Chinese funding, which ideally dictates the source of imports,” explained Mr Adam Mugume, the executive director research at BoU.
From India, Uganda majorly imports pharmaceutical products, veterinary products, oils, distillation products, electrical, iron and steel, stationery products, among others. According to BoU statistics almost all these products recorded a decline in 2016.
The largest composition of Uganda’s import value is the machinery, equipment and vehicles (capital goods) that declined from $1.2b (Shs4.2 trillion) in 2015 to $921b (Shs3.3 trillion) in 2016 – a $298m (Shs1 trillion) drop.
This decline was brought about by a decline in the importation of vehicles from Japan.
Imports from Japan, dominated by vehicles dropped by $100.43m (Shs3612b), according to BoU statistics.
Estimates indicate that Chinese companies are executing road projects estimated at about Shs600b. On most of these contracts, the Sinotruck brand “Howo” is dominant. Already, in January and February 2017, imports from China are about $25m (Shs90b) ahead of those from India.
With Chinese firms expected to win more contracts, including the construction of the Standard Gauge Railway, imports from the country could even double.
“The trend of growth is going to go up even further. That number will continue to grow at double digits in the next five years. The outlook for trade will continue to grow at a rapid pace because the needs of Africa are consistent with what China can provide,” said Mr Jeremy Stevens, the Standard Bank chief economist in Beijing, China told reporters on a recent visit to Uganda.
Chinese firms are also involved in the construction of the Isimba and Karuma power plants. They import steel, machinery and vehicles from China.
In 2016, Uganda imported goods worth $4.2b (Shs15 trillion) from $5b (Shs18 trillion) in 2015.
Credit: Mark Keith Muhumuza / http://www.monitor.co.ug
