China’s debt trap strategy: Uganda set to lose only international airport to Beijing, World News
Uganda could soon join the list of countries victims of the famous technique of the Chinese debt trap.
The country’s only international airport, Entebbe International Airport, is at risk of being taken over by China.
In 2015, the China Export and Import Bank (EXIM) paid Uganda $ 207 million at an interest rate of 2% upon distribution.
The loan, which was intended for the development of Entebbe airport, had a 20-year repayment schedule and a seven-year grace period.
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The government did not change a loan agreement with the Chinese which included repayment restrictions including the attachment of the country’s only airport.
According to the report, Entebbe International Airport and other Ugandan assets were seized and agreed to be taken over by Chinese lenders when the debt was arbitrated.
According to reports, President Yoweri Museveni dispatched a delegation to Beijing in the hope of renegotiating the damaging conditions.
The visit was unsuccessful as Chinese authorities refused to approve any changes to the initial parameters of the agreement.
On November 17, 2015, the Ugandan government, represented at the time by the Ministry of Finance and the Civil Aviation Authority, signed an agreement with the Export-Import Bank of China (Exim Bank) to borrow 207 million US dollars at 2% upon disbursement, with a maturity of 20 years and a grace period of seven years.
According to African media reports, the deal reached with Chinese financiers effectively “handed over” Uganda’s most important airport to China.
According to the Ugandan Civil Aviation Authority (UCAA), certain stipulations in the financing agreement subject Entebbe International Airport and other Ugandan assets to foreclosure and repossession by Chinese lenders as a result. arbitration in Beijing.
Uganda’s request to change the hazardous loan terms was denied by China, putting Ugandan President Yoweri Museveni’s administration in limbo.
The Ugandan government sacrificed international immunity in the deals it made to acquire the loans, exposing Entebbe International Airport to a takeover without international protection, according to the Daily Monitor of Uganda.
Ugandan Finance Minister Matia Kasaija apologized to parliament last week for the “mismanagement of $ 207 million loans” from China Exim Bank for the expansion of Entebbe International Airport.
(With contributions from agencies)