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Uganda/DRC: Kampala offers security and roads for minerals

By Musinguzi Blanshe
Posted on Monday, 31 May 2021 16:59

Uganda's President Museveni attends a swearing-in ceremony for his sixth elective term in Kampala
Uganda's President Yoweri Museveni rides on a military truck as he arrives for his swearing-in ceremony for the sixth elective term at the Kololo Independence Grounds in Kampala, May 12, 2021. Presidential Press Service/Handout via REUTERS

The diplomatic relationship between Uganda and Democratic Republic of Congo (DRC) has been fluctuating -worsening and improving - during the 35 years that Uganda’s President Yoweri Museveni has been in power. But a new deal could steer the fairweather friendship towards a win-win situation.

It ebbed to its lowest point in 1998 after Uganda refused to withdraw its troops from parts of eastern DRC. For two decades, the Democratic Republic of Congo (DRC) and Uganda have been litigating at the Hague-based International Court of Justice (ICJ) over the latter’s invasion between 1998 and 2003. The ICJ will soon give its ruling on how much Uganda must pay DRC in reparations.

As the international community pushed for an end to armed conflicts in eastern DRC in 2003, “suddenly, it was Rwanda and Uganda who were seen as the obstacles to peace,” Jason Stearns said in Dancing in the Glory of Monsters. This was because about a dozen rebel groups supported by these two countries were unwilling to engage in peace talks.

But now Uganda is going back to eastern DRC, not only to pacify the region, but also to invest in infrastructure development. In the new financial year that starts in July, Uganda will begin construction of 223km of bitumen roads in eastern Congo but also deploy soldiers to the region.

A huge market

Uganda’s government argues that Congo is a vast untapped market and better infrastructure is one way of unlocking this market. “This is an investment for Uganda. We are investing to be able to reap better,” says Katumba Wamala, Uganda’s works and transport minister.

But finance minister, Matia Kasaija, recently claimed that a Ugandan legislator labelled him as “a stupid man” for going to construct roads in DRC yet the legislator had asked for a road in his constituency which was not constructed. Kasaija responded by saying: “Congo is a huge sleeping market. This is a strategic investment.”

Kenya and Uganda are positioning themselves to tap DRC’s market and other opportunities once it’s admitted to the East Africa Community.

Trade data from the Bank of Uganda supports the government’s claim. When formal and informal trade figures are summed up for five of Uganda’s neighbours, DRC tops the list with the largest source of export surplus earnings.  Uganda earned $241m trade surplus from DRC in 2020. An estimated $177m from informal trade pushes the figure to $418m in trade earnings.

South Sudan was Uganda’s second largest source of export earnings in 2020. Uganda earned $276m from goods exported to the country, slightly above DRC’s formal trade earnings. The $80m from informal trade with South Sudan is almost half of DRC’s estimates.

Amidst shifting trade policies introduced by neighbouring countries, Africa Kiiza, a trade negotiations and policy analyst at Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) says the Congo market has become important for Uganda. Rwanda closed its border with Uganda in 2019 and Kenya has become unpredictable, after temporarily banning maize, sugar, eggs and chicken from Uganda in the past two years. A ban on import of milk has not been lifted.

If Uganda fails to fully make use of the DRC market after the investment, Kiiza warns: “It will be tax payers to lose.” He also argues that returns from this investment won’t be equally shared by tax payers but a few exporting companies.

More of a pie from DRC minerals

Uganda is one of the main conduits for export of DRC minerals, whether illegally or legally traded, with reports from the UN and other organisations putting Uganda on the spot. Furthermore, senior Uganda army officials have over the past year been accused of taking part in plunder of DRC’s natural resources.

The first accusation was more than half a century ago when Uganda President Milton Obote and Idi Amin, then a deputy army commander, were accused of receiving proceeds from smuggled gold. Uganda soldiers had been sent to eastern DRC to fight against secessionist Moise Tshombe.

The most consequential looting of minerals is said to have occurred during the 1998 to 2003 invasion of eastern DRC by Uganda soldiers. It‘s one of the reasons why DRC is demanding compensation in the ongoing case at the ICJ.

Gold has now become a top export earner for Uganda, according to Bank of Uganda statistics. It made up 44% of Uganda’s export earnings in 2020; but there are no famous sites in Uganda where the country mines gold. Gold exports suddenly surged after the opening of a $20m gold refinery four years ago.

At the launch of the facility, Museveni ordered a removal of taxes on gold, but the taxes are back. The government slapped $200 tax on each kilogram of gold exported, starting the new financial year in July 2o2o. Africa Kiiza opines that the gold tax should be earmarked for infrastructure development in DRC. “It’s important that we tax gold exports and the gold refining companies,” he says. He is cognisant that it’s an uphill task because “much of the gold trade is unregulated.”

A bastion of peace

Museveni has never wasted an opportunity to present himself as a bastion of peace in the Great Lakes Region. After taking oath for a sixth term in office on 12 May 2021, Museveni warned the continent’s leaders that “the (security) situation in a number of points in Africa does not give credit to the African people.” And “Africa can defend itself against any and all aggressors” if states work together.

A return to DRC is yet another opening for Museveni to bolster his credentials. Uganda hopes to completely exterminate Allied Democratic Forces (ADF), a rebel group that has been fighting Museveni since the late 1990s. Its remnants are said to be holed up in parts of eastern DRC. Uganda soldiers will also be providing security to companies constructing roads there.

It’s plausible that Uganda helps in pacifying eastern DRC, says Kasaija Phillip Apuuli, a lecturer of international relations at Makere University. Many rebel groups in the eastern DRC have wrought instability in Rwanda and Uganda. “It’s logical that regional countries help the DRC to gain stability because it’s in our interest as a region.”

During a three-day working visit to Kinshasha last month, Kenya’s Uhuru Kenyatta and DRC’s Felix Tshisekedi signed a security corporation that will see Kenya deploy troops to eastern Congo under the United Nations Organisation Stabilisation Mission in the DRC (Monusco).

Kasaija says Kenya and Uganda are positioning themselves to tap DRC’s market and other opportunities once it’s admitted to the East Africa Community.

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