Chinese President Xi Jinping (R) meets with his Ugandan counterpart Yoweri Museveni in Johannesburg, South Africa, July 26, 2018. (Xinhua/Liao Yujie)
The other day, we watched the President of Uganda, Yoweri Kaguta Museveni, put ink on the Anti-Homosexuality Bill, making it a law that most Western countries described as the “harshest” of all the anti-gay laws globally. Little did we know how much we would have to pay for the actions of the members of parliament and the president. As the consequences become clearer, we ask ourselves where else Uganda can look. Many will not see further than Beijing, but will China help Uganda?
Unanimous Support for the Anti-Gay Bill
Uganda’s 500+ Members of Parliament (MPs), championed by Buguri Municipality MP and lawmaker Hon. Asuman Basalirwa in May, passed what became known as one of the “harshest” anti-gay legislations in the world. The bill assented to by the President of Uganda, Yoweri Museveni Kaguta, on May 26 allows for the death penalty for “aggravated homosexuality” and life imprisonment for same-sex marriage.
But Uganda is not alone. In fact, of the 55 states on the African continent, only South Africa has legalized same-sex marriage. Uganda, Somalia, Nigeria, and Mauritania lead the continent in the anti-LGBTQI campaign, imposing the death penalty. At the same time, Zambia, Sierra Leone, Tanzania, and Sudan all have life imprisonment as punishment for same-sex marriage.
Anti-Gay Presidential League in Africa
In 2014, Africa was labeled the “most homophobic” continent globally. It seems that more and more countries in Africa are following suit. In most African countries, homosexuality is condemned by the general public and attracts institutional dislike, sometimes involving heads of state speaking publicly against it. Let’s look at a few countries and their leaders regarding homosexuality.
Uganda’s President Museveni has been known for his negative public comments on lesbian, Gay, Bisexual, Transgender, Queer, and Intersex (LGBTQI+) people. He has repeatedly told the public that being LGBTQI is not natural but a "psychological disorientation." Although not the first president to do so, Museveni has just signed an anti-homosexuality law.
In 2014, the former president of Nigeria, Goodluck Jonathan, signed an anti-LGBTQI law that could see homosexuals go to jail for up to 14 years. Last year, a Sharia Court in Nigeria's northern Bauchi awarded three gay men the death penalty.
In Zimbabwe, former president Robert Mugabe was a longstanding hater of LGBTQI behaviors. He cleared the ground and enacted tough laws against LGBTQI acts. The late Mugabe was an outspoken anti-gay president who once shocked the UN General Assembly when he concluded his speech with the “We are not gays” statement.
The list could go on and on.
Condemnations and Western shots fired at Uganda
The World Bank has become the first International Financial Institution (IFI) to exclude Uganda from any new loan applications, saying the new law fundamentally violates the bank’s core values. The Biden administration reviews Uganda’s engagement with the United States, including its membership in the African Growth and Opportunity Act (AGO), eligibility for U.S. aid, and warning American homosexuals against visiting Uganda. The administration was also considering “additional steps,” including the application of sanctions and restrictions on entry into the United States by the key figures associated with the legislation. The European Parliament condemned the bill outright, adding that EU-Uganda relations would be at stake should the President sign the Bill. Although Australia’s Foreign Affairs Minister, Penny Wong, who is lesbian, was attacked on Twitter for condemning Uganda’s anti-gay law from all corners, with most of her critics saying they have enough problems at home, LGBTQI advocates and supporters have asked her and the Australian government to sanction Uganda, and also open its doors for Uganda's LGBTQI community to seek protection.
Norms over money?
Uganda benefits immensely from overseas development assistance through grants and loans. Although lately, the country’s official development assistance (ODA) portfolio has shifted to below concessional loans, mostly provided by IFIs, and donor funding from mostly members of the Organisation for Economic Co-operation and Development (OECD) league, it still contributes immensely to Uganda’s budgets. Uganda also borrows non-concessional loads domestically, bilaterally, and from other IFIs. The World Bank (WB), the International Monetary Fund (IMF), and the African Development Bank (AfDB) are Uganda’s biggest IFIs.
To put things into perspective, the US., for instance, according to President Joe Biden, invests nearly US$1 billion annually in Uganda’s people, businesses, institutions, and military. According to the OECD, Uganda received a total of US$2.372.3 billion in aid in 2019, US$3.728.5 billion in 2020, and US$2.0467 billion in 2021. In 2020-2021, for instance, the U.S. poured some $653 million into Uganda.
On behalf of the IFIs, the World Bank disbursed the largest volume of loans between January 2018 and June 2021, amounting to US$1,362.6 million. The World Bank’s loans to Uganda were mostly concessional, with interest rates ranging from 2.6% to 3.0%. On the other hand, AfDB’s loans are mostly non-conceptual.
In terms of sectors, most of the three key IFIs mentioned before (World Bank, IMF, and AfDB) loans have gone into governance and security, infrastructure, education, agriculture, and other key areas of the economy. In 2020, 100% of total loan disbursements from the World Bank to Uganda were under the Covid-19 Economic Crisis Recovery and Development Policy Financing to ease Uganda’s efforts in building back the economy after the deadly pandemic.
The new law puts Uganda on the edge of losing most of the Western support it has enjoyed over the years.
Museveni is defiant, and calls for solidarity.
After signing the bill into law, now comes the daunting task of winning the support of the masses, who will be directly affected by the decision taken by the few leaders—putting up with the impacts of the sanctions on individual pockets. When voting for the bill, Hon. Asuman Basalirwa mentioned looking for new friends in the Middle East, including Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait. This, to me, indicates that the proponents of the bill had a clear understanding of its consequences. Still, I am unsure how many economic deals Uganda can garner from the Middle East.
As you might know, there is a close correlation between the economic slowdown and social unrest. People hate it when prices rise, particularly for food and fuel, or when their salaries are slashed. The president and proponents of the bill understand this better than you and I. We all recall how rising fuel prices and other necessities led to a series of protests last year. Ugandan teachers and doctors have “laid their tools down” several times over delayed wages or demand for a pay rise until the government finally increased the salaries of science teachers last year; However, it excited them, and it still triggered more solidarity among their arts counterparts, who equally demanded a pay rise.
The Ministry of Finance of Uganda has announced revising the national budget following the World Bank loan suspension.
China may not be an option.
While the president, although determined, seems to be concerned about the impacts of the aid cut on the economy. He has, in his latest communications to countrymen, downplayed this and instead softened the hearts of Ugandans by saying that oil revenues would “start coming” in 2025. The Ugandan leadership has repeatedly used anti-colonial sentiment to persuade citizens amid Western threats.
I will base my analysis on China, Uganda’s leading trading partner and bilateral creditor. China-Uganda relations date back to the 1960s. Although China’s Uganda strategy had taken on a rather “mild” dimension after Uganda’s independence, China increased its investments in not only Uganda but Africa in the early 2000s. Under President Museveni, China emerged as Uganda’s top investor and bilateral lender through its BRI. By the end of 2017, Chinese investments in Uganda had reached US $4 billion, and China-related businesses were directly responsible for employing at least 18,000 Ugandans. China, also Uganda’s largest bilateral trading partner, has been topped by bilateral donors, too, through the Belt and Road Initiative. Some major projects that benefited from China’s flagship infrastructure initiative include the Kampala-Entebbe Motorway and the Isimba Dam Project.
From “Projects of the Century” to “Small and Beautiful Projects,”
However, China is rethinking its Africa strategy after pouring billions of dollars into the continent through the mega infrastructure initiative. The tone is now changing from “projects of the century” to “small and beautiful projects.” Since its inception in 2013, the BRI has seemed to be losing steam after Beijing cut funding by over half after the pandemic. According to a recent Green Finance and Development Centre report, BRI funding for sub-Saharan Africa plunged 54 percent last year, from US$16.5 billion to a record low of US$7.5 billion. According to recent Boston University research, China’s two major BRI institutional lenders, the Export-Import (Exim) Bank and the China Development Bank, reduced their lending drastically. For instance 2016, the two banks loaned about $87 billion; in 2021, this figure plunged severalfold to just US$3.7. I call this “hope raised; hope lost.” Most analysts have pointed out that the cut was necessary due to China’s slowing economy and the poor repayment of the BRI loans.
“Poor Helps Poor”?
Although many people think China is a “super rich country,” I often tell people that we must view China from several dimensions. Undoubtedly, China’s 1.4 billion people will contribute more to the country’s GDP, as this is based on the aggregate economic contribution, and number plays a key role. I also want to bring to your attention another incredible achievement of the Communist Party of China (CPC), which lifted 800 million people out of poverty in 40 years. This is a very fast achievement. However, about 82 million Chinese were ‘poor’ as of 2016. China now has 495 billionaires, second after the United States with 735. Also, China is the world's second-largest economy, after surpassing Japan in 2010, and is now arguably running to overtake the U.S. to become the world’s economic superpower.
Although Uganda is not among the top 10 countries with the highest debts to China, neighboring Kenya, the Democratic Republic of the Congo, Kenya, and Ethiopia are on the list. Africa owes China some US$696 billion and struggles to pay it back. A recent analysis estimated that China spent US$240 billion bailing out countries struggling under the BRI. In August last year, China considered forgiving 23 loans from 17 African countries. Zambia might have been among those countries, as it alone owes China $6 billion in debt. Some sinologists have contended that China’s move to cancel the 23 loans might have been due to pressure from the West in the form of the “debt trap diplomacy” description of Chinese lending practices. I argue that China’s BRI is costing Beijing money to manage, and the economic dividend of the project is not being realized. It is not surprising that China refused to fund the Uganda railway project. After China failed to fund the 273 km Standard Gauge Railway linking Kampala to Uganda’s neighboring Kenya, Uganda shifted attention to Ankara. Turkey's Yapi Merkezi has replaced Chinese firm China Harbour and Engineering Company Ltd (CHEC) to build the US$2.2 billion rail line early this year.
As things stand now, Uganda may not get the money it needs for its mega infrastructure projects as China becomes more careful and selective at the same time. But are these what Museveni wants? Definitely not. We want the big fish. And what does China want first? Of course, returns on its investments and, secondly, geopolitical influence.
China’s security dilemma
China shares boundaries with 17 countries and has tensions with most, if not all, of them. I will give you a few examples. Even though Russia and India sit with Beijing at the BRICS table, they have their own issues. BRICS stands for an economic alliance of five major economies: Brazil, Russia, India, China, and South Africa. The alliance has existed for 15 years now. And by the way, this August 15th BRICS summit happens in Johannesburg, South Africa, from August 22-24.
While BRICS unites China and India, I wish the two countries were friends. China and India have long been caught in border disputes. In 1962, although it drew the Line of Actual Control (LAC) for most of the India-China border, the Sino-Indian War left quite a large part Un-demarcated. Territorial disputes between the two countries have shaped their diplomatic relations. Due to repeated border disputes, China and India might be bracing for another war. In September 2021, a disturbing video revealed Chinese and Indian soldiers fighting with sticks and bricks after an alleged “trespass” by the People’s Liberation Army (PLA) into the LAC, an attempt to change the status quo. In June 2020, four Indian and four Chinese soldiers died in the Galwan Valley clash between the Indian Armed Forces and the PLA. The other point of difference between India and China is the growing China-Pakistan relationship. Remember, India and Pakistan are long-time enemies, and India views Beijing’s warm ties with Islamabad as threatening its security.
China also clashes with Vietnam, the Philippines, Japan, and Taiwan (which wants to invade Taiwan) over the South China Sea Islands. In recent years, Beijing has been expanding the islands by building artificial ones and militarizing them immediately. President Xi is serious about territories and will not back down.
"We cannot lose even one inch of the territory left behind by our ancestors," Mr Xi said, according to Chinese state media. "What is other people's we do not want at all," President Xi told the former US Defence Secretary James Mattis during his visit to Beijing in June 2018.
The rising China threat in the Indo-Pacific has led to the formation of the trilateral security pact between Australia, the United Kingdom, and the United States (AUKUS) as a deterrence strategy. Under AUKUS, according to the Australian Prime Minister, Australia and the UK will deliver SSN-AUKUS, a new conventionally armed nuclear-powered submarine based on a UK design, incorporating cutting-edge Australian, UK, and US technologies. The UK will deliver its first SSN-AUKUS in the late 2030s, with the first SSN-AUKUS built in Australia delivered in the early 2040s. The nuclear sub-marines project will cost Australia a whopping US$368 billion, the largest in decades. China’s foreign ministry repeatedly called the deal “a typical Cold War mentality” that violates the nuclear non-proliferation principle. Remember, Australia is a non-nuclear power, which, according to the international nuclear non-proliferation system, is transferred by nuclear powers such as the U.S. and the UK. Again, as you might have heard from Prime Minister Anthony Albanese, AUKUS insists that nuclear-powered submarines are “conventionally armed, "meaning they do not qualify as weapons of mass destruction. China also fears nuclear threats from Pyongyang and the potential spillover of Myanmar's insecurity into its borders.
Now that you understand the security dilemmas China faces worldwide, Beijing has embarked on a military buildup. Beijing has lifted its military spending by 4.2% this year from $298 billion last year. China’s military spending has increased by 75% in the last 10 years. Australia has equally increased its military spending to 2.2% of the GPD this year, up from 1.9% last year. Last year, India raised its military budget by 6%, while Japan and Pakistan broke their below 1% of GDP military budgets by raising their military spending by 1.08%. I argue that Beijing's increased security spending will affect its overseas loans, including to poor nations like Uganda.
China’s growing ageing population
The other issue is population. According to UN estimates, India surpassed China to become the world’s most populous country this April, but China’s 1.4 billion people are overwhelming. Moreover, China’s sheer elderly population is problematic. According to the Lancet, in 2019, 254 million people in China were aged 60 years or older; this number could increase by over 58.2% to 402 million by 2040. To give a simple illustration of how the growing ageing population is dangerous, it was, of course, during the recent wave of the COVID-19 pandemic, where 59,938 COVID-19-related deaths were reported in hospitals in China between December 8, 2022, and January 12, 2023, 90·1% were in people aged 65 years or older (Lancet 2023). Population aging and slower labor force growth affect the economy in many ways, reducing the growth rate of GDP, increasing the costs to working-age people of supporting the elderly, and stressing public budgets.
“Zero-COVID policy” and the economy
On that same note, China’s “zero-COVID'' policy has left a devastating impact on its economy. The policy aimed at keeping cases as close to zero as possible, but this came at a huge cost—it suppressed demand, reduced manufacturing, disrupted the supply chain, and slowed down the Chinese economy to the lowest points since reform and opening up in the 1970s. The Chinese populace is uninterested in spending their savings or investing in durable commodities such as houses, cars, and other property. Youth unemployment in China is some of the highest at 21.3% in June 2023, while economic growth is about 5.2% and not 5.6% as previously anticipated. These difficult economic conditions, I argue, will have longer-term impacts on the Chinese economy and, consequently, overseas investment, especially on mega infrastructure projects that poor nations like Uganda are in dire need of.
China’s other problems include climate change. According to the World Bank, China already experiences frequent coastal flooding, storm surges, coastal erosion, and saltwater intrusion. It is estimated that climate change, if not mitigated, could lead to estimated GDP losses of between 0.5 and 2.3 percent as early as 2030, according to the report.
I think China already looks overburdened to loan large chunks of money to Uganda. On the other hand, external risks, including the high corruption rate in Uganda, uncertainty as the 2026 general elections draw nearer, and anti-Chinese sentiments in the form of the “debt trap diplomacy debate, among others, worry China.
While things seem tight for Uganda, the nation needs to work on its internal challenges, especially corruption and human rights, and create a safe environment for international business. Alternatively, other IFIs, such as the IMF and AfDB, could continue to lend to Uganda. I perceive further aid cuts and sanctions from America and its allies sooner or later. Even with the highly anticipated oil revenues, the country will not achieve much if corruption is not dealt with. Uganda will have no option but to borrow from non-concessional lenders if the World Bank stands its ground.
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