China's President Xi Jinping (L) and his Kenyan counterpart William Ruto shake hands during the high-level meeting on the Belt and Road Initiative that he co-chaired at the Forum on China-Africa Cooperation Summit in Beijing, China on September 5, 2024.
China has announced new initiatives for Africa, including a pledge of about $51 billion in financing over the next three years.
At the Forum on China–Africa Cooperation (Focac) in Beijing this week, President Xi Jinping pledged 30 infrastructure connectivity projects, 30 clean energy projects, as well as 1,000 “small and beautiful” livelihood projects on the continent.
And the East African Community (EAC) Secretariat came out to back partner States in seeking funding for projects that will enhance regional connectivity and growth.
The EAC has established a platform with development partners to mobilise funds for development of key corridors and networks. The Northern and Central Corridors, which are the most vital in the region, form the backbone of the East African economy.
EAC Secretary-General Veronica Nduva who attended the forum said infrastructure development remains a priority for the community as it is essential for regional integration and economic growth.
“The EAC’s participation in Focac builds on the strong foundation established by the framework agreement signed between the EAC and China in November 2011,” she said.
In support of these efforts, the EAC has instituted the Multinational Road Development Programme, which connects the partner states to facilitate trade and integration.
Some of the EAC-wide projects for which funding has been sought are the Kampala-Entebbe Expressway and the standard gauge railway (SGR) extension from Naivasha in Central Rift to Kampala Uganda. China financed the first two phases of the Kenya SGR from Mombasa to Naivasha, before funding was frozen, amid debt trap concerns. The stretch cost at least $3.8 billion.
The regional bloc also supports the revamp of the Tazara Railway between Tanzania and Zambia, and the road expansion into a dual carriageway between Nairobi and Kampala, among other projects.
On September 4, China, Tanzania and Zambia signed a memorandum of understanding on the $1 billion Tazara revival project. The line could see a train run from Dar es Salaam to the Southern Africa Development Community and Comesa member-States.
East African presidents William Ruto of Kenya, Tanzania’s Samia Suluhu Hassan and Rwanda’s Paul Kagame were among African leaders who attended the Focac. Uganda’s Yoweri Museveni was represented by Vice-President Jessica Alupo.
Kenyan and Ugandan officials were expected to return from Beijing with funding for the Naivasha-Kampala stretch of the regional SGR line.
Ugandan officials were this week upbeat that works on the section between Malaba and Kampala would start next month, banking on the deal with Turkish firm Yapi Merkezi.
Kampala was making another push for joint sourcing of financing from China, with Works and Transport Minister Gen Edward Katumba Wamala in the delegation to Beijing expected to thrash out deals on Uganda’s SGR financing.
On September 3, VP Alupo met president of the Exim Bank of China Ren Shengjun at the bank’s headquarters to lay the ground for their discussions on SGR funding proposals before end of the summit.
She cited the need for balanced financing terms and the bank’s continued support of Uganda’s priority flagship infrastructure projects in the energy, transport information communication, and technology sectors.
By press time, there were no details on offers tabled, but Waiswa Bageya, Permanent Secretary in the Ministry of Works and Transport, told The EastAfrican that “this time, we are hopeful there will be positive news on the harmonised bid for financing of our SGR together with Kenya.”
Insiders say Uganda is upbeat on securing required funding sourced from multiple lenders and its budget allocations, with the overarching objective of executing Malaba-Kampala rail line and extending to other parts of the country to connect interior markets of the Northern Corridor, Rwanda, Democratic Republic of Congo and South Sudan.
This fiscal year, Finance minister Matia Kasaija said the government’s focus would go beyond land acquisition and be put “on commencement of construction of the standard gauge railway” for which he allocated Ush2.21 trillion (about $600 million) for this purpose.
The SGR project coordinator Perez Wamburu says the decision to give a sizeable allocation of the budget to the project is proof of intent towards launching construction this year.
“We’ve always only had money for acquiring [land on] the corridor, but our budget this time includes money to start construction. That’s significant,” he said.
Earlier in the week, PS Bageya said Uganda would begin construction of its 273-kilometre Malaba-Kampala phase starting next month, indicating the urgency to build the railroad that could provide a better alternative to transport cargo on the Northern Corridor.
He said all requirements had been met for the Turkish firm to begin construction of the railway to Kampala.
“Uganda is ready to start the construction starting October this year by Yapı Merkezi Group from Türkiye as the engineering, procurement and construction (EPC) contractor, while the funding is expected to be sourced from European banks,” Mr Waiswa said in Mombasa, where he was attending a handover ceremony at the Northern Corridor Transit and Transport Coordination Authority.
“As Northern Corridor executive, we are concerned about the diminishing cargo volumes to Burundi and Rwanda, which are being handled by Dar es Salaam. This is affecting throughput of the corridor and, ultimately, the Mombasa port. That is why Uganda and Kenya need to move with speed and connect SGR between the two countries,” the PS said.
In May 2023, Uganda identified Yapi Merkezi as the EPC contractor of the project meant to be financed by the government of Uganda using borrowed money from the Standard Chartered Plc of the United Kingdom at a contract price of $2.2 billion.
Kenya, on the other hand, has been chasing funding from China to complete the Naivasha-Malaba section.
In 2019, then President Uhuru Kenyatta visited China but failed to secure $3.68 billion to fund the third phase of his signature SGR project.
Instead, Kenya bagged some $400 million to be used to upgrade its century-old metre gauge railway to Malaba on the border with Uganda.
President Kenyatta had hoped to secure the funds to take the SGR from Naivasha in Central Rift Valley to the lakeside town of Kisumu, and on to the Malaba border, from where Uganda would extend it to Kampala and beyond.
China withheld funding for the final segment of the SGR to the Uganda border and asked Nairobi to work with Kampala in conducting a fresh feasibility study for the project.
Beijing’s assessment indicated that without Uganda, whose participation is key to connecting South Sudan and Rwanda to the Indian Ocean port of Mombasa, the SGR’s viability was grossly undermined.
In July 2023, Ugandan and Kenyan ministers of transport met in Mombasa and agreed to jointly explore sourcing funding for the Naivasha–Kisumu–Malaba-Kampala line.
Together, the two countries were seeking at least $6 billion in new funding for the projects from financiers in Europe and the Middle East. China is now the likely financier, on the Kenyan side.
In February 2024, both countries reaffirmed their commitment to see the kick-off of the Naivasha-Kisumu-Malaba section in Kenya and the Malaba-Kampala section in Uganda.
Nairobi has maintained that despite Uganda settling on their preferred investor, it is still exploring more options to give Kenyans the best deal.
Mohammed Daghar, Kenya’s Transport Principal Secretary , had earlier said Kenya was talking to different partners.
“We are still exploring our choices in China, Turkiye and other partners who can come on board to develop the railway,but we are yet to settle on one,” he said.
But the PS was non-committal on whether Nairobi was considering engaging Yapi Merkezi.
The project has been in abeyance for over five years.
Uganda initially awarded the contract for the first leg of the Malaba-Kampala line to China Harbour Engineering Company (CHEC) Ltd in 2015, on the basis that the contractor would help secure the bulk of the $2.2 billion loan from the Eximbank to finance the project.
But, after eight years of non-execution due to Eximbank’s doubts about the project’s economic viability without a guaranteed link with Kenya’s SGR, and the inevitable reluctance to release funding, the Uganda government in November 2022 terminated the contract with CHEC and picked Yapi Merkezi. Deputy Attorney-General Jackson Kafuuzi is currently studying the Yapi contract.
China has been Africa’s biggest trading partner in the past 15 years, and has funded big-ticket projects in line with its Belt and Road Initiative (BRI), or as the Silk Road, meant to link it and the world through physical infrastructure.
Under the Beijing Action Plan (2025-2027), China says it will work with Africa in the next three years to implement 10 initiatives “to advance modernisation for China and Africa.”
President Xi, in his keynote address at the summit on September 5, said China is ready to “deepen cooperation with Africa in industry, agriculture, infrastructure, trade and investment, promote exemplary, high-quality Belt and Road cooperation projects, and build together a model for the delivery of the Global Development Initiative.”
“To implement the 10 partnership actions, the Chinese government will provide RMB360 billion yuan ($50.7 billion) of financial support through the next three years. This breaks down into RMB210 billion yuan ($30 billion) of credit line, RMB80 billion yuan ($11.27bilion) of assistance in various forms, and at least RMB70 billion yuan ($9.9 bilion) of investment in Africa by Chinese companies,” he said.
The 10 partnerships cover trade, industrial chain cooperation, connectivity, healthcare, green development, and security, among other areas.
China promises duty-free treatment to 100 percent of the tariff lines of products from least developed countries (LDCs) with diplomatic ties with it.
It will sign framework agreements on economic partnerships with African countries and expand access for agricultural exports from Africa.
Among the 30 infrastructure projects proposed for Africa to promote interconnectedness are transport infrastructure and industrial parks built and operated by Chinese companies.
Beijing says it will fund and build a multimodal sea-rail transport network that connects China’s central and western region to Africa.
Within the East African region, infrastructure development remains a priority for the EAC, as it is essential for regional integration and economic growth.
On security, China says it is keen to on a peace and security plan as part of their efforts to improve global safety governance system.
