Modi dangles Shs1 trillion for Uganda as China’s Xi woos Rwanda

Indian Prime Minister Narendra Modi is today afternoon expected in the country on a two-day state visit during which he will formalise a $205m (Shs1 trillion) credit line from India to Uganda.

Mr Modi will jet in from neighbouring Rwanda where Chinese President Xi Jinping was earlier on as part of his four African country tour.

Both Heads of State are visiting Africa for the second time. Mr Modi first visited Mozambique, Kenya, Tanzania and South Africa in 2016, while Mr Xi visited a year earlier, in 2015, for the first high-level BRICS summit.

Both India and China are members of BRICS, an association of five major emerging national economies, Brazil, Russia, India, China and South Africa.

During Mr Modi’s visit to Uganda, India is expected to sign off a Shs1 trillion credit line for Uganda, of which Shs523bn is expected to go to the energy sector while Shs237bn has been earmarked for agriculture and dairy production.

The two countries will also sign MoUs for cooperation in the fields of ICT, waiving visas for holders of diplomatic and official passports, renewable energy, and cultural cooperation and exchange programmes.

After bilateral talks with President Museveni and the signing events, Mr Modi will, later in the day, address the Indian community at Kololo Independence Grounds. Uganda is home to an estimated 30,000 Indians.

On Wednesday, he is expected to address the India-Uganda business forum with Mr Museveni and thereafter address Parliament.

Unlike his predecessors, Mr Modi has ramped up its relations with Africa, sending top officials to the continent in recent years. In 2015, Mr Modi convened the India-Africa summit which was seen as a timely response to the US-Africa summit convened by former US President Barack Obama in 2014, and to China’s increasing hold on the continent.

China was also the biggest source of Uganda’s imports in 2017, accounting for 16.2% of Uganda’s total inbound shipments in the year, valued at $5bn. It was followed by India with an 11.9% share. Imports from China grew by 9.7% in the year, compared to a 15% decline for India.

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Mr Xi kicked off his Africa tour last Saturday with a visit to Senegal, followed by Rwanda, South Africa, and later Mauritius. In Rwanda, Mr Xi who touched down in Kigali on Sunday night was expected to sign 15 bilateral pacts with Kigali. These include a “visa exemption for diplomatic and service passport holders, culture and scientific operations, as well as Silk Road Economic Belt cooperation.”

Both Mr Xi and Mr Modi attend the BRICS summit, to be held in Johannesburg between Wednesday and Friday under the theme “BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the Fourth Industrial Revolution”.

The BRICS summit, for which Uganda has been invited alongside Ethiopia, Namibia, Angola, Rwanda, Togo, and Gabon – as “observers” – is also expected to discuss ways out of the ongoing trade war between the Trump administration and other powers, including China and the European Union.