Chinese State-owned Enterprise Investments in Uganda: Findings from a Recent Survey of Chinese Firms in Kampala

Abstract

Within the large body of China-Africa literature, there is a growing body of literature that differentiates between China’s various economic actors, more specifically between its state-owned and private enterprises. This paper intends to contribute to this literature by comparing Chinese state-owned enterprises and hybrid (mixed owned) enterprises with private enterprises in Kampala, the capital of Uganda. An air of mystery often surrounds Chinese companies in Africa, this paper will provide some clarity concerning companies in Kampala. To do this we first look at the governmental assistance given to these companies, then the kind of assistance they potentially receive. Next we investigate what motivated these companies to come to Uganda, and how they established themselves, whether it is after a Chinese aid project or construction job, or some other route. We further investigate the size, employment policy and markets of these Chinese state-owned enterprises in Kampala. Finally we look at the employment of Ugandan labour and management, the problems faced by the enterprises and the environmental challenges, as well as how these are dealt with. We conclude that Chinese SOEs and mixed ownership companies in Uganda are involved in a small range of sectors, often capital-intensive sectors such as oil and construction, and are therefore also larger than the majority of the Chinese private enterprises. SOEs and mixed ownership enterprises tend to have arrived in Uganda earlier than most private enterprises, face slightly different problems, and are more interested in the Ugandan market as whole than their privately owned counterparts. More importantly, they have greater proportions of local employees and are more interested in indigenizing their workforces.