Unfair Trade: Open Letter by Luzindana Adam Buyinza to Chinese President Xi-xiping,USA President Joe Biden and Uganda’s President Yoweri Museveni.
The author is Luzindana Adam Buyinza, A Small Scale Natural Products Processor and Team Leader of Public Opinions a field based Research, information Dissemination and Public Awareness Organization in Uganda
Uganda and China Trade Relations 2019:
While China exports a diversified mixture of goods to Uganda such as electronic goods, garment, footwear and machinery, it’s important to note that 90% of Uganda’s exports to China are agricultural goods comprised mostly tea, coffee, spices, plastics, leather, and skins. The Bilateral relations between China and Uganda began in the early 1960s. In the decades that followed, economic and trade cooperation between the two countries diversified considerably, resulting in a trade volume of close to 1.3 Billion USD in 2019.
Chinese’ investment in Uganda has been in the manufacturing sector, electricity, gas, water and personal services. China has also offered loans to Uganda to build roads and hydropower dams but these projects are implemented by Chinese firms with minimal respect for rights of workers, local content and human resource development. The Chinese embassy in Uganda should engage Chinese companies in Uganda to commit themselves to international best practices and standards.
China has also substantially increased its aid commitments to Uganda over the years, which it has provided in the form of technical assistance with an emphasis on training in Chinese institutions, grants, interest-free loans, preferential loans that have an interest subsidy and debt relief.
Uganda has no doubt benefited from its ties with China so far. Owing to market distortions, however, and the high costs of shipping merchandise to China, Ugandan traders have found it cheaper to import goods from China than produce them locally. The painful part is that most of the Chinese firms that have invested in Uganda have been privately owned by Chinese rather than joint ventures between Chinese and Ugandans. Both these trends have had a dampening effect on employment generation and economic performance in Uganda. While Uganda is boasting of Industrialization success, Uganda Local industries are losing market and can’t effectively compete with Chinese firms in Uganda. This explain why Ugandans are now more of retail traders not manufacturers. The industrial sector in Uganda is now dominated by Chinese and Indian entities. This is dangerous.There is need to promote local industrialization if Uganda is to truly transform into a self-sustaining industrial nation.
In 2019, China exported its goods to Uganda worth 1 billion USD .In other words china made 1bn USD in 2019 from Uganda. In the same year, China imported Ugandan goods into china worth 33m usd.In otherwords Ugandans made only 33m usd by exporting to China. It’s also important to note that Chinese citizens in Uganda are key exporters of Uganda’s goods to China. This is unfair trade and it’s my request that Chinese Government commit itself to meaningful and beneficial trade that benefit the people of Uganda while also benefiting the Chinese people. The Trade deficit stand at 970 Million USD dollars in regards to Uganda-China trade. However I recognize that over 4,500 Ugandans have attended training courses backed by China, covering various subjects including public management, social organization, education, economy and trade, mineral resources, agriculture and health, among others. This is a good gesture and as Ugandans we appreciate.
President Museveni has been committed to promoting Trade and not foreign aid but our trade with china is unfair and we need interventions now or we lose as a country but it will be detrimental to Uganda-China Relation. The government of Uganda and China should really rethink and work on strategies to increase Uganda exports to China otherwise this is the most exploitative trade relation of the 21st century…Why should china export to Uganda goods worth 1bn usd and Uganda export to China goods worth 33m usd in 2019 only.Which economic is this?
Uganda-USA Trade Relations-2019
The U.S. Government strives to promote democracy and human rights, ensure regional stability, support health initiatives, and spur economic growth and development in Uganda. With the clear policies and focused leadership of President Museveni, The United States provides significant development and security assistance to Uganda, with a total assistance budget exceeding $970 million per year. The U.S. government plays a key role in supporting the professionalization of the military; providing anti-retroviral treatment for more than 990,000 HIV-positive Ugandans; and working to boost economic growth and agricultural productivity, improve educational and health outcomes, and support democratic governance through inclusive, accountable institutions. The U.S. mission is working with the Government of Uganda to improve tax collection and oil revenue management, and to increase Uganda’s domestic funding for public services and the national response to HIV/AIDS. This aid enables Ugandans to build a better future for themselves and their children hence attaining a shared vision of a peaceful, prosperous, healthy, democratic Uganda.
With President Joe Biden in White House, Ugandans are anxious that USA contribution to Uganda will reach 1 billion USD and we are optimistic that USA will now commit its self to support infrastructural projects in Uganda.
Uganda’s tourism earning amounted to over 1.6 Billion USD in the year 2019 with over 1.5 Million International tourists visiting Uganda in which over 20% were from USA and countries allied to USA while 80% were from African nations with Kenya sending the biggest number of tourists to Uganda. Uganda need Strategic Investments in the tourism Sector.
The remittance by Ugandans in the diaspora amount to over 1.4 billion USD in 2019. Out of the $1.4b that Uganda receives in remittances from all over the world, Ugandan migrant workers in the Middle East countries remitted slightly over $510m in 2019 with other remittances made by Ugandans in USA and USA allies in Europe and south Africa as well as some countries in Asia.
USA-Uganda Trade Relation 2019:
In 2019, USA exported goods to Uganda worth 104 million USD.In other words, USA made 104million USD by selling its goods to Uganda. In the same year 2019, Uganda exported goods to USA worth 80m USD.In other words Uganda made 80m USD in 2019 by selling its goods in USA while in the same year Uganda exported goods to china worth 33m USD and China exported goods to Uganda worth 1 billion USD .This amounted to a trade surplus of 24m USD between Uganda and USA.
In 2019, USA exported to Uganda: aircraft ($29 million), plastics ($16 million), machinery ($16 million), electrical machinery ($12 million), and optical and medical instruments ($5 million). The U.S. total exports of agricultural products to Uganda totaled $5 million in 2019. Leading domestic export categories include: wheat ($2 million), condiments & sauces ($849 thousand), prepared food ($219 thousand), pulses ($189 thousand), and planting seeds ($164 thousand).
The Uganda top export to USA in 2019 were coffee, tea, spice, unroasted coffee) ($56 million), art and antiques ($2 million), glue & enzymes ($2 million), precious metal and stone (diamonds) ($2 million), and other special other items totaling to $10 million.
The USA aid to Uganda is beneficial and a huge contribution to the social economic transformation of Uganda notwithstanding the fair USA-Uganda trade relations… However USA should revise its policy and invest or support infrastructural Development projects as well as community oriented development programs in Uganda.
Our country as opened up to the world but we need fair trade, technical support, human capital development, innovation and constructive trade not exploitative trade.
The author is Luzindana Adam Buyinza, A Small Scale Natural Products Processor and Team Leader of Public Opinions a field based Research, information Dissemination and Public Awareness Organization in Uganda.Tel;+256701992426, Web:www.publicopinions.net