However, the latest controversy on the contract to supply and install digital equipment seems to have strained the relationship between the Ugandan government and Chinese companies. Huawei is accused of inflating the cost of the contract in addition to flouting procurement procedures.

"There is high corruption in the telecom sector because Chinese companies are not following country laws in tender acquisitions because of certain conditions attached to the loans from China," said Edith Mwale, telecom analyst from Africa Center for ICT Development.

Huawei was contracted to supply and install the digital equipment for Uganda Broadcasting Corp. (UBC) through a private negotiation, without advertising to allow other companies to bid for the tender. Tender procedures in many African countries including Uganda allow for competition in the bidding process.

The Ugandan government has been under pressure from opposition lawmakers who questioned the cost of the contract and the manner in which the contract was awarded.

Opposition leader Nandala Mafabi told journalists last week that the list of equipment in the tender was totally different from that of the contract. Nandala claimed the real value of the contract is between $20 million and $28 million and not the $74 million being claimed by Huawei Technologies.