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Resource-Financed Infrastructure: Thoughts on Four Chinese-Financed Projects in Uganda

Author

Listed:
  • Tom Ogwang

    (Urban & Regional Studies Institute, Faculty of Spatial Sciences, University of Groningen, 9700AV Groningen, The Netherlands
    Mbarara University of Science and Technology, P.O. Box 1410 Mbarara, Uganda)

  • Frank Vanclay

    (Urban & Regional Studies Institute, Faculty of Spatial Sciences, University of Groningen, 9700AV Groningen, The Netherlands)

Abstract
Increasingly common methods for financing public infrastructure in developing economies are Resources-for-Infrastructure (R4I) and Resource-Financed Infrastructure (RFI), usually involving Chinese financial institutions and Chinese construction companies. Although there are advantages to the borrowing country from these project financing arrangements, there are also various issues and governance challenges. In Uganda, expectations around future revenue from oil extraction have led to many infrastructure projects being commissioned, mostly funded by RFI arrangements. To consider the appropriateness of these arrangements and to reflect on whether they are likely to contribute to positive development outcomes or be examples of the resource curse, we examined four public infrastructure projects: Kampala–Entebbe Expressway; Karuma Hydroelectric Dam; Isimba Hydroelectric Dam; and the Malaba to Kampala section of the East Africa Standard Gauge Railway. Although R4I/RFI arrangements are viewed positively by some commentators, others (especially local companies) consider they lack transparency, create unsustainable debt, promote China’s interests over the borrowing country, increase unemployment, unfairly compete with local business, deal in corruption, have poor working conditions, and result in substandard construction. Nevertheless, we conclude that Uganda and other developing countries have generally benefited from Chinese-funded infrastructure, and there is more myth trap than debt trap. However, to ensure positive development outcomes, governments and construction companies should ensure compliance with international standards, especially relating to: environmental and social impact assessment; human rights; benefit-sharing arrangements; livelihood restoration; and project-induced displacement and resettlement.

Suggested Citation

  • Tom Ogwang & Frank Vanclay, 2021. "Resource-Financed Infrastructure: Thoughts on Four Chinese-Financed Projects in Uganda," Sustainability, MDPI, vol. 13(6), pages 1-22, March.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:6:p:3259-:d:517774
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    References listed on IDEAS

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    Cited by:

    1. Meihui Zhang & Chi Zhang & Fenghua Li & Ziyu Liu, 2022. "Green Finance as an Institutional Mechanism to Direct the Belt and Road Initiative towards Sustainability: The Case of China," Sustainability, MDPI, vol. 14(10), pages 1-31, May.
    2. Enos Olando Oundo, 2024. "Effectiveness of Public Procurement Process Guarantees in Donor Funded Projects in the Eastern Africa," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(8), pages 3543-3557, August.
    3. Ronald Jjagwe & John Baptist Kirabira & Norbert Mukasa & Linda Amanya, 2024. "The drivers and barriers influencing the commercialization of innovations at research and innovation institutions in Uganda: a systemic, infrastructural, and financial approach," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-37, December.

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