Zone Profile: Sino-Uganda Mbale Industrial Park
Sino-Uganda Mbale Industrial Park has been a key to increasing local entrepreneurship and sustainable development of the country.
Africa's road to globalization
In 2018, 54 countries in Africa joined together to form the continent’s largest free trade area : the African Continental Free Trade Agreement, or AfCFTA. A trade agreement of this size is comparable to the founding of the European Union.
In this context, it is worth noting that many AfCFTA members are also participating in the Chinese Belt and Road Initiative. Uganda is one of the countries that has received a significant amount of infrastructure investment under this initiative. 
In 2013 Chinese President Xi Jinping revealed the intention of a cooperation project between China and Central Asian countries to strengthen trade routes along Europe, Africa and Asia, reminiscent of the ancient Silk Roads. Within such an initiative, which would later become known as the Belt and Road Initiative, a huge amount of infrastructure investment would be exploited by all countries in this area of interest.
Uganda and China forged closer ties under this project in 2018, following the Beijing Summit of the Forum on China-Africa Cooperation, where they signed a Memorandum of Understanding . Although many infrastructure projects were already being developed in the country long before, this event marks an important step in their execution and consolidation.
A cog in the productive machine of Uganda
One of the projects currently being developed with Chinese capital in Uganda is the Mbale Industrial Park. Located in the Mbale region of eastern Uganda, this project covers an area of 2.51 square kilometers . Its location, some 220 kilometers from Kampala, the capital of Uganda, and 65 kilometers from the Kenyan border, seeks to reach out to the East African markets.
The story of this industrial park begins on July 7, 2017, when the Sino-Uganda Mbale Industrial Park Development Agreement was signed between Tiantang Group and the government of Uganda .The objective pursued by this initiative is attracting Chinese companies to invest in the country, seeking to strengthen their path to industrialization.
The park expects to attract 30 resident companies with a total investment of US$600 million, creating 12,000 jobs for local people. The groundbreaking ceremony was held in March 2018 , attended by President Museveni and leading Ugandan political figures.
The key player in setting up this project is Zhang Zhigang, the Chinese entrepreneur behind the Tian Tang Group. His first action in Uganda dates back to 2009, when the group bought more than 35 acres of wasteland in Mukono district of central Uganda. There, it set up what would later become the Tian Tang Industrial Park. 
Today, that park employs more than 2,000 young people, across four factories that deal in steel, foam and wood. In addition, some 10,000 jobs have been indirectly created through the supply chain of the factories. After the success of its first industrial park, Tian Tang Group embarked on the creation of a national impact project, which would lead to the Sino-Uganda Mbale Industrial Park. 
Investment and development: the story of Mbale Industrial Park
One of the first and main sources of funding for the park's development and construction activities is Orient Bank, a Ugandan national bank. In 2018, days after the opening of the park, they signed a memorandum of understanding with Sino-Uganda Industrial Park to become the official financiers of the investment activities in the park 
The park is being invested in by a number of Chinese-owned companies, which are developing various industrial activities in the area. The first group of companies to settle in the park carried out the first construction works in November 2018.
According to the Uganda Investment Authority, companies currently operating in the park include :
- Pearl Light Technologies, which produces LED bulbs;
- Ubon Personal Care, which produces detergents and cleaning products;
- Victoria Cables, produces high and low electric voltage cables; and
- Kyoga Textile Company, producing textiles, specifically hosiery.
Also, by 2019, seven factories were under development to join the industrial complex. Among the companies are:
- Auto Mobile Uganda Ltd. dedicated to vehicle assembly;
- Rhong Hui, which will produce steel structures;
- Rong Sheng, clothing; Homate, construction materials; and
- Bai Fu Energy, packaging materials, bottles and boxes.
In addition to the industrial development plans, Sino-Uganda Mbale Industrial Park opened a small and medium enterprises' incubation base in 2019 . This project covers 20 acres of the industrial park's surface area, for the construction of which US$80 million was invested. The park authorities claim that they are seeking to attract investments for local entrepreneurs, aiming to generate some 3,000 jobs. In this way, they are not only creating a space for Chinese investors, but also creating conditions to help the emergence of small and medium-sized Ugandan companies.
One of the most ambitious projects in the park is being carried out by Baifu Group, a company that integrates energy, engineering, healthcare, tourism and big data services, with businesses in the Chinese provinces of Hebei, Shanxi, Henan, Guizhou, Hunan, Jiangxi and other northeastern provinces. Together with Lida Group, they are building a plant to take advantage of local natural resources and sufficient manpower to develop a renewable chemical energy project. They claim that they seek to position it as the largest chemical energy regeneration project in Africa .
Upon completion of its development, the Sino-Uganda Mbale Industrial Park authorities expect to achieve an annual production value of US$1.5 billion , annual export value of US$400 million and the creation of 15,000 jobs for the local population.
The special investment status is temporary, so government authorities expect local taxes to achieve a figure of US$50 million for the year by the end of the exemption. This is aimed at making Uganda a competitive destination for long-term investment, creating strong links between investors and the country.
Squatters in the zone
Despite its history of development, the Sino-Uganda Mbale Industrial Park has had problems reaching agreements with the local population that occupied the land on which the industrial park now sits.
The territorial arrangement in tribal Uganda before 1900 was due to territorial divisions between local tribes. There was no proper demarcation of land ownership rights. However, with the signing of the Buganda Agreement in 1900, between the local tribes and the United Kingdom, the process of property demarcation in the territory that now comprises the country began . The most significant change from this moment on is the recognition of individual land rights, beyond the collective rights that had prevailed until then.
Diffusing property rights over land do not allow landowners to effectively delimit their interests and give people the opportunity to illegally occupy someone else's land. This is an issue from which the Ugandan government does not escape, as the occupation of public lands has been a common practice in the country  in recent decades. The people who occupy these publicly owned lands are known as squatters.
Due to the characteristics of the land surrounding the city of Mbale, rural farming is a common practice among the families that occupy this territory. Thus, by the time the Sino-Uganda Mbale Industrial Park was established, an important number of families were occupying the land where the park's facilities would be located , where rural cassava cultivation predominated.
Although the government and the park's management company have diligently pursued a policy of compensation and relocation for the people who previously occupied the land, as of mid-2020, there were still more than 30 families living on the industrial park's land. Many of these people consider this territory their ancestral lands, and refuse to abandon their roots . This is especially significant, as this is not a problem that can be solved with a simple relocation, as these families are strongly tied to their land, even if it is their only means of subsistence.
Months later, the same families denounced having been forcibly evicted  from the land they were occupying in the night, appealing to President Museveni to intervene and order the Uganda Investment Authority to duly compensate them for the damage caused.
Despite these allegations, government authorities are appealing to squatters who reject compensation for the land to take their case to court  in order to reach a negotiated solution that will allow the project to proceed. The authorities claim that more than 800 squatters were on the land where the park is located before the project began. In addition, they implored all those who were still considering compensation to drop their cases in court  to negotiate compensation that would allow the project to continue.
Due to its geographical position, Uganda is a privileged country in the African region.
Located on the equator, Uganda has one of the best climatic conditions in Africa. Due to its situation as a landlocked country whose wages are relatively high compared to East Asian countries , replicating the export-oriented Special Economic Zones model of that region is not an appropriate development policy.
Instead, Uganda's comparative advantage can be found in natural resource-based activities, hand in hand with industries requiring skilled labor, without necessarily referring to factories. Uganda's central position on the continent allows it to offer a strategic location for investors who want to take advantage of both the local market and the regional connections it offers.
A relevant point in this regard is that Uganda's location in the center of the East African Community may be of interest to industries that benefit from large economies of scale, being able to serve several neighboring markets from a single base of operations.
The creation of the Sino-Uganda Mbale Industrial Park represents an opportunity not only for China's interests through the Belt and Road Initiative, but also for the development of local entrepreneurship, which is key to the sustainable development of the country.
However, the Chinese government sees Sino-Uganda Mbale Industrial Park as an important investment opportunity. This is to the advantages of its geographical position, as well as the preferential policies that have been made through cooperation between the Chinese and Ugandan governments .
You can find more about Special Economic Zones on the Open Zone Map, here
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- China-Ukraine Mbale Industrial Park welcomes the ninth enterprise entering the park; ZWMIP
- Current status of the park: ZWMIP
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