The government of Uganda has opened its doors to foreign investors, inviting them to set up businesses in the Namanve and Mbale industrial parks.
While this initiative aims to boost the economy and create jobs, tensions are rising among investors at the Mbale industrial park, where disagreements are beginning to surface.
As businesses compete for resources and market share, some investors are finding themselves at odds, leading to bickering and concerns about collaboration.
This growing friction could impact not only the atmosphere in the park but also the overall success of Uganda’s efforts to attract foreign investment and stimulate industrial growth.
Recently, two Chinese investors were violently attacked in their apartment at Namanve Industrial Park, Uganda, in the early hours of September 18, 2024.
The victims, Liu Qingshan (63) and Lu Hanbin (32), who own the Ugandan NEC-WATU Automobile Group, suffered serious injuries in what seems to be a fallout from rising business tensions.
The attack, carried out by seven Chinese nationals allegedly backed by armed individuals possibly linked to the Uganda People’s Defence Forces (UPDF), occurred around 5:00 AM.
The assailants broke into the apartment, smashing doors and windows, and brutally assaulted the victims before stealing electronic devices like two mobile phones, a desktop computer, and a laptop.
The attackers, led by a man known only as Martin, escaped in a convoy of five vehicles, including a white Prado with the license plate UBF 588F.
Police arrived shortly after the attackers had fled and registered a case of assault at Namanve Police Station.
Qingshan and Hanbin were quickly taken to Nakasero Hospital for treatment of head, back, and leg injuries.
Initial investigations indicate that the attackers fled towards Mbale, with one vehicle captured on the Jinja Bridge surveillance cameras at 1:40 AM.
Reports further suggest they were escorted by two armed personnel from the UPDF’s 3rd Division.
Escalating Business Dispute
This violent incident comes just hours after Qingshan and Hanbin accused the Tian Tang Group, a competing Chinese business managing the Mbale Industrial Park, of plotting to evict them from their operations.
NEC-WATU Automobile, a joint venture with the UPDF’s private company NEC, focuses on manufacturing automobile filters and air cleaners.
However, tensions have risen as Tian Tang Group, which holds a 15% stake in NEC-WATU, allegedly controls the land where the company operates.
Qingshan has voiced his frustration, claiming that Tian Tang Group is deliberately sabotaging their business by withholding crucial documents like land titles and trying to force their eviction.
The looming threat of eviction has led NEC-WATU to consider drastic options. Qingshan warned that if the harassment continues, they might have to shut down operations and relocate to neighbouring Rwanda or Kenya.
This would be a significant loss for Uganda’s industrial sector, as NEC-WATU currently employs nearly 200 workers and has already installed 120 units of FAW heavy trucks and JMC pickups to meet the country’s automotive needs.
Alleged Corruption
The attack on Qingshan and Hanbin highlights a larger problem at Mbale Industrial Park, where many Chinese investors are sounding the alarm about alleged corruption involving the Tian Tang Group.
According to a whistleblower, Tian Tang secured a 49-year lease for 600 acres of land in Mbale from the Ugandan government, paying just $5 a year.
However, it’s claimed that Tian Tang has been reselling this land to other investors for much higher prices, ranging from $40,000 to $200,000 per acre.
The whistleblower also alleges that Tian Tang is using its connections with the Uganda Investment Authority and other government agencies to dominate land deals.
This has forced new investors to give up shares in their businesses just to get access to land.
Additionally, Tian Tang is said to be renting out empty warehouses for $5 per square meter each month, making it hard for businesses to succeed due to high costs.
These practices are reportedly driving up the price of goods produced in Mbale Industrial Park, making Ugandan products less competitive.
Many factories are struggling to cope with the high land and rental costs, leading to bankruptcies among Chinese investors.
Despite these difficulties, whistleblowers claim that Tian Tang continues to move large sums of money out of Uganda through the black market while pretending to be successful.
Government Intervention Needed
Given these troubling developments, Qingshan has appealed to President Yoweri Museveni for help, urging the government to protect honest investors who are helping to grow the economy.
“If the President doesn’t help, I will close and move to Rwanda or Kenya,” Qingshan said, clearly frustrated by the lack of support.
With allegations of corruption involving both local and Chinese officials, the future of Mbale Industrial Park and Uganda’s overall industrial growth is uncertain.
If these issues aren’t addressed, they could damage investor confidence and undermine efforts to make Uganda a manufacturing hub in East Africa.
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