Chinese billionaire Paul Zhang unveils plans for new industrial city in Kayunga to decongest Kampala

Chinese investor Paul Zhang is set to establish a new industrial city in Lusenke, Kayunga District, in what government officials say could transform Uganda’s economy and ease pressure on Kampala.

The project has been allocated 120 acres of land near a hydropower station, on orders of President Yoweri Museveni.

It is expected to create up to 50,000 jobs once fully operational. Officials say the development is part of a broader strategy to decentralise economic activity and reduce congestion in the capital.

“What if Kampala’s traffic jams could be eased not by widening roads but by building a whole new industrial city outside it?” Zhang explain the vision behind the project. 

“A lot of people from other districts come to Kampala even for school… but if we set up this city we might be able to divert some of the traffic.”

Zhang is not new to Uganda’s industrial sector. He is widely known for spearheading major industrial parks, including the Mbale Industrial Park and the Mbalala Industrial Park in Mukono District.

These parks have attracted dozens of factories, producing a range of goods such as mobile phones, steel products, vehicles and household items like mattresses. The developments have contributed to job creation and increased local manufacturing capacity, reducing reliance on imports.

In Mbale, his investments have helped turn the area into one of eastern Uganda’s fastest-growing industrial zones, while Mbalala has become a key hub for light and heavy manufacturing near Kampala.

The Kayunga project is expected to build on this track record, with a new wave of Chinese investors already expressing interest in setting up factories in solar energy and chemical production.

Minister of State for Investment and Privatisation Evelyn Anite welcomed the development, describing it as a major step towards Uganda’s long-term economic goals.

“The president has granted him 120 acres of land in Kayunga near the hydropower station for an industrial zone. Mr Paul wants to build an industrial city which will create 50,000 jobs,” she said.

She added that Zhang’s track record gives confidence in the project’s success. “This is exciting because he is not new, he is a household name. My plea to the citizens is that let us support these investors for the growth of our economy to grow our GDP to $500 billion,” she said.

The planned industrial city is expected to attract both local and international manufacturers, improve value addition and create opportunities across supply chains.

If successful, officials say the project could mark a shift in Uganda’s development model by moving jobs and services closer to communities, reducing migration to Kampala and easing the capital’s growing congestion challenges.