The China Electric Power Equipment and Technology Company has tested Uganda’s power firm with a sumptuous deal to take over the business franchise. The company has tabled a whooping $3 billion deal to the Government of Uganda in the purchase of Uganda Limited. The Chinese firm has given the word to revamp the services of the company to serve best its customers.
The audacity of the Chinese firm to take over the largest energy distributor in Uganda has worried the management and stakeholders, with fears of the ripple effect to the Uganda Stock Exchange. It is a tempting offer to the Government who could see a new era of the company once the Chinese take the driving seat. This proposal could test the trade partnership between the two states, being a more tricky decision for Uganda on the receiving end.
China has played a key role in the development of Uganda’s economy with the Foreign Direct Investments (FDI) that has raked in revenue for the Government. Its financial inclusion and expertise in mega projects have been vital for the progress of the country. It could be a tactical measure to increase its dominance in Uganda but on the other hand it could be beneficial to the East African country, as it battles with challenges in the sector.
President Yoweri Museveni has expressed his wary concerns over high tariffs despite measures to bring the tariffs down. This has been a barrier to see the number of investors swarming in the country to establish industries with the price to pay being extortionately high. It has had a major effect to the domestic consumers as well who have expressed their disappointment with the tariffs.
Umeme company could force more so retail investors to look for other investments elsewhere should China takes charge over the business.
With American firms and French companies doing all they possibly can to dominate the African markets with their foreign investments, China could be falling in the same trajectory. With the prospects of a number of French firms looking to invest in Uganda due to its strategic location, China could just take over an established firm and run with it.
The Ugandan company could be on the crossroads with all the tensions rising. This could either strengthen their ties or leave a bitter taste in their economic bonds.