HOW THE AUTOMOTIVE INDUSTRY HAS SUCCEEDED IN NEW EMERGING MARKETS

HOW THE AUTOMOTIVE INDUSTRY HAS SUCCEEDED IN NEW EMERGING MARKETS By Moses Sserwanga Global economic transformation and stability is now largely dependent on the existence of value adding industries such as the automotive industry, which have under the “Asian Miracle” clearly demonstrated that they are capable of driving and reinforcing economic growth. The importance of the automotive industry for emerging markets in Asia and Africa cannot be over emphasized given the fact that it had a global net value of US$1,654 billion by 2015, registering a 30% increase from 1995 to 2015. And yet the automotive industry is both an innovator and investor in technology advancement, investing over US$99.1 billion in research, development and production with a contribution of US$448 billion as government revenues. The realization of these benefits is majorly hinged on the premise of favorable industrialization policies adopted or proposed by governments or business entities in these emerging markets and this article seeks to understand how vehicle production countries have beaten the odds to become successful even with the global economic meltdown of the mid 2000s. In Asia, governments of major vehicle production countries such as China, South Korea, Malaysia, and Japan, have played a virtual role to ensure that their automotive industries, do not only grow and survive the global economic turbulences but that such industries are at the center of growth for these now dubbed economic tigers. In these countries, several policy interventions have been put in place from provision of affordable financing, to infrastructure development, provision of investment incentives, encouragement on innovation at all level of high learning and industry development to local content development programs. In regard to provision of product tailored financial services, the automotive industries have benefited from the provision of liquidity and risk management services. Affordable credit has been made available to allow value chain actors (public sector) to invest beyond their cash on hand and allow customers to purchase vehicles without settling the entire cost in advance. For instance, South Korea and Taiwan have become important hubs of global manufacturing in the automotive industry with protectionism policies being applied by governments as a means to attract foreign direct investment while also fostering growth of the domestic industry which encourages utilization of local content across the value chain. The role of the South Korean government with regards to its automotive industry, is a good example to start with.The South Korean government began by playing an extensive role in nurturing and supporting its automotive industry during its infant stages through a combination of import-substitution and export-promotion policies. Inorder to realize its dream of producing vehicles locally, the South Korean government put in place the Automobile Industry Promotion Policy of 1962, and The Automobile Industry Protection Act to protect the infant industry. This barred foreign automakers from operating in the country, except through joint ventures with local business entities. The same policies were applied by Japan when its corporations began to produce more vehicles in the mid 50s. The Japanese government at the time took deliberate measures to restrict vehicle imports in order to promote the Japanese auto industry. It should be noted that this state-industry-support- approach did not go down well with the already established vehicle production countries like the United States of America which seldom criticized Japan's protectionism policies as being naïve and of little value since the vehicle market in Japan was very small at the time. Later, under the guidance of the Ministry of International Trade and Industry, the Japanese auto industry began to weed out small companies through mergers and eventually reached its current state. Japan's annual vehicle production gradually increased and is now ranked third among the top six vehicle producing countries in world having put on the market 9.3 million vehicle units in 2015. Active promotion of technical education Extensive technical education is bound to raise the general level of technology. It is important to note that the Japanese government’s role in developing the automotive industry was in getting it started and nurturing its development. Policies addressing innovation in the automotive industry are geared towards the creation of network institutions in the public and private sectors whose activities and interactions foster knowledge or information flow between the automotive industry and the attendant enterprises This approach has seen the deliberate promotion of collaborations and joint research activities at universities and public research institutes leading to diffusion of knowledge and technology into other value chain actors. China, the world’s leading vehicle producer today has not been left behind in the state’s sponsorship of the automotive industry either. The China activist government policy has liberalized the Chinese automotive sector in some key respects — permitting foreign investment but also remaining firm that foreign manufacturers undertake joint ventures with local partners in order to obtain market access. The stated goal of the Chinese government over the years has been geared at creating a market dominated by a limited number of internationally competitive joint venture assemblers, supplied by local parts manufacturers, and producing to world standards. The results attained from these policy initiatives have been globally recognized with nearly three decades of rapid economic growth where the domestic Chinese auto industry has made substantial progress. The ripple effects have also been many leading to the emergency of independent domestic automotive manufacturers. Although because of the protectionism policies, the Chinese vehicle producers met some hurdles which included creation of their own designs and meeting world standards in terms of product quality, safety, and environmental features, the domestic manufacturers are expanding their market share and are slowly moving up the value chain. China’s annual vehicle output increased from less than two million vehicles in the late 1990s to over 28 million in 2016. Its auto industry is already a major force propelling the Chinese economy and its workforce, with an annual gross output at US$ 440 billion in 2009 and over 3.7 million workers in automotive production, according to China’s auto industry association and officials. The Stimulus packages that saved the automotive industry from collapse When the global economy mired in an economic slowdown with global vehicle production dropping more than 10 million units in 2009 from the record high of over 72 million units built in 2007, governments of the major vehicle producing countries such as the USA, China, and Japan, put in place radical economic stimulus packages that boosted their failing automotive industries. Again these were government led interventions to support and prevent their automotive industries, which are the engines of their respective economies, from collapsing. It was not long before the positive impact of such initiatives was seen. A clear example is that of China, following the stimulus package from the Chinese government, China’s auto industry registered a rapid growth in 2009 and 2010. In 2009, China produced more than 13.6 million vehicles, overtaking Japan to be the world’s largest producer. In 2010, the growth momentum continued, bringing China’s vehicle production to nearly 18.3 million units, almost doubling its 2008 out registered before the global economic meltdown. The Chinese government had opened up its auto market to international companies but only with the understanding that its domestic manufacturers would not be able to compete with the more sophisticated and experienced foreign rivals. Foreign automakers were allowed to enter the Chinese market only through joint ventures with local partners, often times state-owned companies (SOEs), each with no more than 50% controlled by a major foreign name plate automotive manufacturer. Some of these joint ventures have seen VW joining forces with Shanghai Automotive Industry Corporation (SAIC) and First Automotive Works Corporation (FAW). SAIC is also a joint venture partner of GM, while FAW is also a partner of Toyota. Honda and PSA Peugeot Citroen have both formed partnerships with Dongfeng Motor Corporation. It is the same story with Malaysia which used a state led auto development approach by building national champions before eventually commercializing and privatizing. All this shows that the automotive industry which is going to be a major force for economic emancipation in the East Africa region and on the African continent as a whole will require infant industry policy interventions for sustainability and ultimately competiveness. South Africa doesn’t allow the importation of used vehicles and this has protected its industry. South Africa policy framework is a transition from infant industry protection into a new open global economy i.e. industrial support and industrial competitiveness. The reason why Multinational Companies (MNC’s) take hold of the South African Economy is through an existing gap that is in form of technology and marketing gaps which are deemed the center of focus on attracting FDI to overcome the gaps. By way of their competitive advantage MNC possess technology and marketing capabilities that enable early production and export ability starting a positive trajectory of industrial growth for developing economies. This does not mean high value addition, a challenge South Africa faced, hence the call for black empowerment programs in their latest Automotive Production and Development Program. To overcome this problem small local firms that cannot access big overseas markets can only easily access them through the linkages held with lead OEMs who have access to global value chains. Their alternative is to penetrate and access neighboring emerging markets. South African policy aims to reduce its marketing gap through increased exportation strategy though the policy still faces a high technological gap that should be addressed by existing licensing agreements and joint ventures. In Kenya, you can’t import a vehicle that is more than eight years old. All these policies help protect the industry. Kenya’s automotive industry has grown especially in the passenger bus and truck/trailer categories because of such policies. Research and Development Capabilities The creation of a strong domestic R&D capability as an essential element in the development of a successful indigenous automotive industry enables both the transfer of intellectual property from international companies and the creation of intellectual property that can be the basis for a strong, export-oriented indigenous automotive industry. The key factors that have contributed strongly to the success of South Korea’s auto industry policy were export orientation and policy effectiveness. Export performance provided an objective criterion for government support. Despite the change in policy regime to import substitution in the 1970s, export-oriented development was still the top policy priority and various factors worked to soften the negative effects of distortive intervention. In addition the government went ahead and implemented the policies once the direction was set. As the government undertakes the Kiira Motors Corporation (KMC) investment with strategic outlook for developing the nascent automotive industry, it is interesting to observe key policy interventions benchmarked elsewhere which could engender sustainable realization of a domestic automotive industry value chain. ENDS

THE KENYA SUPREME COURT DECISION WILL HAVE DIRE CONSEQUENCES

THE KENYA SUPREME COURT DECISION WILL HAVE DIRE CONSEQUENCES The Supreme Court of Kenya has set precedent on the African Continent by overturning a presidential election result throwing the hitherto conservative jurisprudence in disarray. But the justices may have rushed to overturn the results which might lead to dire consequences for the East African nation. In the first place , all parties agree that the elections are determined at the polling stations . And it seems there were no problems at the polling stations . The petitioners’ case just like in the Mbabazi’s case centered around the transmission of the results from the polling stations to the tally center in Nairobi. If that was the focus of the dispute , the justices should then have recalled the results from the polling stations as contained in the tally sheets to verify , isolate those cases where there is a mismatch , and then reach a conclusion as to whether such inconsistencies affected the total overall figure in a substantial manner . Unfortunately the Court did not evaluate that evidence in the tally sheets, they didn't verify and instead rushed to play to the galley and nullified the same. The Courts decision then looked more of a political than a legal one . The court wanted to set a precedent as being the first to do that and get the rave reviews which they are now enjoying at a huge cost that awaits the country . Many jurisdictions not only in Africa but America , South Africa, Nigeria, Canada , India among other , have been very reluctant to overturn presidential elections due to the financial , legal and social political ramifications not forgetting the security and stability of a state . Now, the Kenyan decision has many both positive and negative ramifications but will highlight a few negatives ones . Let me start with the legal ones , the courts are going to.be flooded by a multitude of petitions from the local governors and other constituent elections . Because any smart lawyer will argue that if the Supreme Court has declared that the presidential elections lacked integrity and all, how then can the local elections be clean when.it was the same Electoral Commission that conducted those elections as well. Secondly, basing on the judgment , the commission should be disbanded and the opposition has already filed a suit to that effect. That suit will be appealed up to the Supreme Court and when it is successful , then the electoral commission will have to be disbanded and a new one appointed with new electoral officials across the country . Question then is will the country be in position to hold fresh elections in 60 days as required by law ? Again the answer to that question might be in the negative . That will then mean the parliament will have to amend the constitution to enlarge time . So we don’t see Kenyans getting over this till the new year meanwhile, they won't have an effective government for that period because Uhuru is now a lame duck as we all know it . Lastly, we wait to see the guidelines that will be set by court in its detailed judgment that will have to.be followed to ensure that the next results from the next elections will be accepted by all parties. This is because there cannot be a flawless election anywhere in the world that's why the substantially test was developed and adopted in many jurisdictions. But you can only apply that test if the court is willing to verify the transmitted results . In the case of Kenya , court didn't want to do it because of the time and resources involved and instead took the easy path of throwing it back to the voters and the cost is going to.be much more than if the court had endured to verify the results at the polling stations because that's where the winner is determined and not in the process of transmission .

WHAT IS THE FUTURE OF ELECTRIC CARS IN UGANDA AND AFRICA

electric cars , green mobilty, kiira ev, kayola solar bus What is the future of Electric Cars in Uganda and Africa? When Engineers at Kiira Motors Corporation, (KMC) unveiled electric concept vehicles the Kiira EV and the Kayoola Solar Bus the first of the kind on the African continent not many predicated that electric cars are taking center stage in the automotive industry across the globe. Renowned carmaker Volvo has since announced that all its new models will have an electric motor from 2019. The Chinese-owned firm, best known for its emphasis on driver safety, has become the first traditional carmaker to signal the end of the internal combustion engine as we have come to know it. It plans to launch five fully electric models between 2019 and 2021 and a range of hybrid models. It is also not a secret that Kiira Motors Corporation also have a hybrid model, the Kiira Smack on their concept innovations display. Geely, Volvo's Chinese owner, has been quietly pushing ahead with electric car development for more than a decade.It now aims to sell one million electric cars by 2025. International Automotive Industry commentators state that Volvo's announcement is a direct reflection of where the auto industry is headed. Early this month, US-based electric car firm Tesla announced that it will start deliveries of its first mass-market car, the Model 3, at the end of the month. Elon Musk, Tesla's founder, said the company was on track to make 20,000 Model 3 cars a month by December.His company's rise has upset the traditional power balance of the US car industry. Tesla, which makes no profits, now has a stock market value of $58bn, nearly one-quarter higher than that of Ford, one of the Detroit giants that has dominated the automotive scene for more than a century. And when the boss of Europe’s biggest listed oil company says his next car will be electric, it says a lot about the future of fossil fuels. So the question then is what is the future of electric cars in Uganda and the African continent in general. Future of electric cars in Uganda and Africa The Chief Executive Officer, of Kiira Motors Corporation (KMC), the winners of the prestigious , 2016 Frost & Sullivan Award for Visionary Innovation Leadership, Mr. Paul Isaac Musasizi , has offered some interesting insights about the future of electric cars in Uganda and the African Continent. Mr. Musasizi says that the solution to rising trends in urban pollution due to mobility technology is to go for electric public mobility technology, “Electric Buses for Urban Public Transport”. Musasizi refers to key statistics from several analysts which highlight that with the used vehicle imports representing over 85% the annual stock of vehicles registered annually in Uganda at an average age of 16 years at registration, it is not surprising that these end-of-life vehicles contribute to the declining national fuel efficiency and transport-based carbon emission which rose to 13.7L/100km and 0.5kg/km in 2014 respectively. Musasizi further observes that with the import value of vehicles and vehicle parts rising from USD 89.7 Million in 2000 to USD 550 Million in 2015, the industry requires key reforms aimed at cultivating domestic value addition and strategic focus on green mobility especially for urban mass transportation. Musasizi’s views are echoed by Royal Dutch Shell Plc , Chief Executive Officer Ben Van Beurden who recently noted that the whole move to electrify mobility in Europe, china and the United States was good to protect the environment and ensure sustainable development for the present and future generations . Because of the importance Shell attaches to environment conservation , Van Beurden will switch from a diesel car to a plug-in Mercedes-Benz S500e in September 2017. The United Kingdom said it will ban sales of diesel- and gasoline-fueled cars by 2040, two weeks after France announced a similar plan to reduce air pollution and meet targets to keep global warming below 2 degrees Celsius (3.6 degrees Fahrenheit. Kiira Motors Corporation the pioneers of the green (clean energy) mobility technologies in Uganda , East Africa region and the African continent last year won the prestigious Frost & Sullivan Award for Visionary Innovation Leadership. Each year, Frost & Sullivan presents this award to a company that has demonstrated the ability to understand and leverage global Mega Trends, integrating this vision into processes to achieve strategic excellence. According to Frost and Sullivan, Kiira Motor’s vision extends far beyond that of standard vehicle manufacturing processes. ‘ ‘Its sustainable mobility solutions provide massive opportunity for vehicle development and commercialisation in a country that is lagging behind in African and global automotive indices.’’ The focus on developing sustainable electric, hybrid, and solar vehicles will allow KMC to capture the leadership position in an uncontested market space,” said Frost & Sullivan Research Analyst ZiyaadHanware.

WHAT IS THE FUTURE OF ELECTRIC CARS IN UGANDA AND AFRICA

THE NEW LAND LAW IS RECIPE FOR ECONOMIC TRAGEDY

THE NEW LAND LAW IS RECIPE FOR ECONOMIC TRAGEDY

When Parliament recommended radical changes to our land law in 2007,exactly 10 years ago,  I wrote this article in my Column The other Side of The Law, which was published by the Daily Monitor for five  years . I'm glad to reproduce it given the on going  debate about the government Land amendment Bill  2017 and the the Land Inquiry Commission headed by Lady Justice Catherine Bamugemereire.

This and many other articles on topical legal issues can also be found on my blog: msserwanga.blogspot.com.

The parliamentary joint committee appointed to handle the Land (Amendment) Bill 2007 has once again succumbed to pressure from the executive arm of government and recommended that the controversial changes to the land law be enacted in total disregard of public opinion.

Whatever the mischief the new amendments are intended to cure, the entire process of protecting the rights of ‘squatters’ has been flawed in a sense that no national consultations were carried out to rally Ugandans to support the new legislation. It’s ironical and illogical that the legislators could have the audacity to recommend that the amendments be passed into law and then national consultations be held later. Of what purpose will these ‘consultations’ serve when Parliament has already pronounced itself on the matter?

The machinations by the state to do as it pleases, without taking into consideration the opinions/views of the stakeholders, are a clear manifestation of leaders who are out of touch with the people they lead. In a recent survey commissioned by Monitor Publications Ltd (MPL) and carried out by a reputable research organisation, the Steadman Group, it transpired that six out of every 10 Ugandans are not satisfied with the government’s approach to solve the land problems in the country.

The polls showed that 66 per cent of Ugandans are disenchanted with President Museveni’s management of land issues. And this is besides the fact that knowledgeable and independent interest groups like the Uganda Land Alliance , Uganda Human Rights Commission and the Uganda Bankers Association are all opposed to the amendments and have since called for nation-wide consultations to be conducted before the law is amended.

It’s clear that the amendments will face serious legal challenges because they are basically creating competing rights of ownership of land– which is an important factor of production. With the peasants pitted against the landlords, land will unfortunately be rendered a non-saleable commodity.

The bankers have already, and rightly so, warned that the controversial land amendments being forced onto the people will close the market for mortgages and loans from which banks depend for most of their business. With a struggling economy and land prices going through the roof, people can only own a piece of land by acquiring mortgages through their bankers. But this cannot be possible when in the market, you don’t have a clear legally recognised owner of the land!

And this is not to argue that citizens should be evicted from their land illegally. The existing law has sufficient safeguards against illegal land evictions. The peasants, the majority of whom are squatters or settlers on vast chunks of land, already have their rights protected by the constitution.

The constitution provides for the protection of the land rights of the registered land owners (landlords) and those with equitable or secondary interests in land like the tenants by occupancy or bibanja holders , the bona fide occupants (people who have lived on any given piece of land unchallenged for more than 12 years before the coming into effect of the 1995 constitution) and lawful occupants (those who settled on land with the consent of the registered owner by virtue of the Busuulu and Nvujjo law of 1928). The provisions of the constitution are reinforced by the enabling law, the Land Act.

This column has stated in the past and repeats now that there is no serious lacuna (gap) in our land legal regime. The major problem is the poor implementation of the law and politicisation of the land conflicts across the country.

Securing lasting legal rights for the peasants/squatters can only be realised through purchase and subsequent transfer of title from the registered land owners to the buyers who in this case can be the peasants. The government should put in place a land fund to enable the peasants buy land and thus secure their land rights. Artificial legislation shall be successfully challenged in court and we shall be back to square one!

The writer is  Media and Communications Consultant/Trainer
and Adocate of The High Court of Uganda .
msserwanga@gmail.co.ug

WHERE IS THE CIVILITY OF SECURITY AGENTS?

Media freedom and other attendant rights accorded to an individual by our constitution, last week received a boost when the High Court in Fort Portal ordered for the reinstatement of a political radio programme which was ordered off the airwaves by state security operatives.

Justice Rugadya Atwooki concurred with advocates representing Life FM, a private rural radio station, that the security agents' actions were unconstitutional and violated the Electronic Media Act. The judge ruled that the suspension of a political radio programme by state agents was inconsistent with what is acceptable and demonstrably justifiable in a free and democratic society.

Although for sometime now, the courts have been slowly developing our jurisprudence in all spheres of media law, this particular case is unprecedented because unlike in the past where the majority of settled media cases largely involved the print media (newspapers), the judgment in Fort Portal concerned itself with the electronic media (radio).

We have heard threats from government officials and the president to deal with radio stations or presenters who freely debate and tackle issues of human rights, democracy, corruption, good governance and the general rule of law.

This is because in most cases, the issues discussed directly affect the state and the people who run it . But instead of owning up and engaging their critics, our leaders often and unjustifiably, consider such critical views as treasonable and use the state machinery to muzzle them. Why should a spoken or written word be taken to be treasonable? Why should Ugandans tolerate incendiary statements by our leaders and army generals yet they (the masses) are denied the same freedoms to express their thoughts?

The free flow of information and ideas lies at the core of the very notion of democracy, which is effectively about respect for human rights. Democracy is about accountability. The public have an alienable right to scrutinise actions of their leaders and engage in open debate about the general welfare of the country. Unfortunately, our leaders at all levels are terribly afraid of these values and just don’t want the people to know the goings on in government .

And the reason for this belligerent behaviour, the intolerance and genuine fear among our largely corrupt, undemocratic leaders is clear- they have turned themselves into the law. It’s common knowledge that in rural areas and up-country towns, state operatives are on the loose! They are increasingly exploiting people's ignorance of the law and their constitutional rights to harass, intimidate and in worst cases terrorise the masses with abandon.

A case in point is the Life FM station in Fort Portal where a whole Regional Police Commander Martin Abilu who should have known better that media freedoms are constitutionally protected ordered the management of the radio station to “immediately and forthwith” suspend the “Twerwaneho” programme because, to him, it incited public anger against the government.

Why can’t our nation learn from other advanced democracies where restraint and tolerance for opposing views has become the cornerstone for upholding civil liberties!

Let’s take a recent scenario in the United States where inflammatory remarks by pastor Rev. Jeremiah Wright, the hitherto leader of Chicago’s Trinity United Church of Christ, shocked the American society.

Rev. Wright, who for 20 years was the pastor of Mr Barrak Obama, a popular candidate for the USA Democratic Party nomination, accused the US government and whites generally for giving black people drugs and building bigger prisons for them. He then called on God to damn America for treating its citizens as less than human.

President Bush’s right wing Conservative Party which controls White House, did not send paratroopers to close down Trinity United Church of Christ nor did they arrest or arrange prosecutors to charge Rev. Wright.

Similarly, Mr Obama did not disown his long time pastor. Instead he (Obama) and the rest of the Americans and the media, have engaged Rev. Wright in a civil manner to show that his remarks are outdated, wrong and have no place in the modern era.

Surely, can’t Ugandans especially our national leaders borrow a leaf from this! Can’t we for once, in our 30-year turbulent political history, learn to engage each other in a more tolerant fashion and resolve our differences political or otherwise, in a civil manner?

The write is a journalist and advocate
msserwanga@gmail.com

Moses Sserwanga interviewed Uganda's ambassador to China about the economic ties between the two countries now that China is the second largest economy in the world
excerpts bel

Can you give us an overview of the economic relationship between China and Uganda?

The relationship between China and Uganda is good. We engage in the private sector, commerce, trade, investment and government projects. The e-government project in Uganda is one of the several projects supported by China with $106million under concessional loan arrangement. Other projects include: a hospital of 100 beds, which is being built at Naguru, Kampala, an agricultural technological demonstration centre, aqua-culture and a fish farm which is being built at Kajjansi. Also inclusive is a government complex, a twin building which is being constructed adjacent to Parliament, the former Criminal Investigations Department Headquarters among others.

What are the trading ratios and Chinese investments in Uganda this year?

Trade volumes have been growing. In 2006, trade volume between China and Uganda was $170 million and we are now in excess of $300million.

What are the major exports to China?
At the moment, it is cotton, hides, skins, coffee and fish.

In terms of Foreign Direct Investment how has Uganda benefited from China’s tremendous economic growth?
According to Uganda Investment Authority records, Chinese companies are the leading investors in Uganda at the moment. I do not have the exact figures though.

What is the latest about the National Back Bone Infrastructure knowing that internet is now a major factor for development and then the e-government project where a Chinese company Hauwei is providing software systems?
The first phase of the project was largely to improve communication coverage within Kampala, Entebbe and Jinja for purposes of successfully hosting Chogm. The second phase is to cover the broader area of Uganda beyond the three towns and eventually to cover the whole country and ultimately the 3r 3rd phase is to cover the component of e-government.

How was the NBI and e-government project supposed to work in areas where there is no electricity?
In terms of the e-government project in Uganda, there are two aspects to it. One, the usage, the ability to use and the desire to use. This is a new project. It is supposed to go up to the sub-county level. Depending on whether those people in the offices at the sub-county would wish to use these facilities. There is the issue of facilitating the infrastructure that is put in place in order to increase the utilisation of the e-government which will help to provide good environment for investors and businessmen. It will cut down on the red-tape and corruption. The government is handling its part, which is to provide electricity to various locations. There is a programme financed by China for development of solar energy, late this year or next year targeting electricity deficiency in the remote areas.

It is alleged that shoddy work was done on the NBI, what’s your response?
If somebody says shoddy work was done that is a subjective statement because I believe this was a big project and there were set standards, set specifications and set quality outcomes. To say shoddy work was done there must be an evaluation done by some authority and the same authority must have determined that shoddy work was done. To the best of my knowledge no competent authority came up with report to say Huawei did shoddy work. It was speculation by different people.

Ingrained in the contract, there were set standards. Somebody must have proved that Huawei breached the contract in terms of those set standards. We have the National Information Technology Authority, we have the Ministry of ICT, I guess we have several agencies in Uganda who would come up with a position that Huawei did shoddy work and not based on speculations as was the case.
Secondly this is a big company in China and globally which cannot allow their reputation to be tarnished by substandard work. There were allegations of corruption; again this was subjective and speculative. Uganda has well stipulated procurement procedures which were followed and I know the Chief Executive officer of Huawei and top management practice zero-tolerance to corruption. Rather than speculate, Ugandans need to embrace this project. The contractors have done a good job according to the facts available to me.

How about the issue of cost? There are reports that the Uganda project cost more than that of Rwanda.
That is comparison. What were the components in terms of e-government and NBI? There is the element of taxation. In Rwanda did they pay taxes, the area coverage? The information I have is that the cost taking into account all the components was almost the same. There were no major deviations. The Uganda component is inclusive of equipment and civil works and taxes.

Is China interested in oil extraction or oil refinery in Uganda?
China has shown interest in the oil industry in Uganda. Chinese companies are already taking over interests of Heritage in the exploration stage. The President of Uganda has been emphasising that we will not export crude oil and that we must refine it from here.

The Minister of Energy has been to China for talks. Sinopec, a major Chinese player in the oil industry has shown interest in building an oil refinery in Uganda and I hope the negotiations will be successfully concluded. Sinopec officials will be visiting Uganda sometime next month (September) for more negotiations. Once the negotiations are concluded, hopefully by the end of this year, we will be in position to negotiate with the government of China.
How many Ugandans are living and studying in China?
At the moment, every year China offers Ugandan students scholarships at all levels, at graduate and post graduate levels, 35 students per year and there is an existing exchange programme for human resource training. Every year, more than 300 Ugandans of various disciplines come to China for various courses ranging from one year to six months. There is a lot of cooperation at the political level, in terms of training. There are vast opportunities and there are times when there is a need for specialised skills obtainable in China and a request is made by the Ugandan government to the China government and the embassy follows up the matter.

How will Uganda benefit from the 2010 World Expo in Shanghai, China?

First we are grateful to the China government for supporting Uganda and other countries to take part. They provided money to set up the African pavilion. I was told about $650,000 was spent for the construction of the African pavilion. The Expo will help us to showcase what we have, especially in areas of tourism. Many visitors have been to our stand. The benefits are many.