Chinese lenders, the Export-Import Bank of China, also known as Exim Bank, has taken over the Ugandan Entebbe International Airport and other assets in the country over the failure of the Ugandan government to repay a loan.

The Museveni-led Ugandan government had on Tuesday, 17 November 2015, signed an agreement with Exim Bank to borrow $207 million at two per cent upon disbursement.

The loan had a maturity period of 20 years including a seven-year grace period, but it had now appeared that the transaction signed with the Chinese lenders practically means Uganda “surrendered” its most prominent and only international airport.

The Uganda Civil Aviation Authority (UCAA) revealed some provisions in the Financing Agreement with China that exposed Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon negotiation in Beijing.

According to the Daily Monitor, the Ugandan government waived international immunity in the agreement it signed to secure the loans, exposing Entebbe International Airport to take over without international protection.

In desperation, Uganda in March 2021 sent a delegation to Beijing hoping to renegotiate the toxic clauses of the deal but the officials came back empty-handed as China would not allow the terms of the original deal to be varied.

Last week, Uganda’s Finance Minister, Matia Kasaija, apologised to parliament for the “mishandling of the $207 million loan” from the China Exim Bank to expand Entebbe International Airport.

National Treasury Cabinet Secretary Ukur Yatani denied that Nairobi had mortgaged Mombasa port to get the loan for the standard gauge railway and assured the nation that Beijing will not seize the port should the country default on the $3.2 billion SGR loan.

“Kenya did not offer the strategic national asset as collateral for the $3.2 billion loan sourced from the Export Import Bank of China (Exim China) to finance the SGR project. As such, Mombasa port has no adverse exposure to any lender or category of lenders through existing loan agreements with the government,” Yatani said.

This week Wu Jianghao, Chinese Assistant Minister of Foreign Affairs, said the talk about China’s debt trap in Africa is propaganda.

“Why is money offered by Western countries to developing countries considered ‘assistance for development’ while the money offered by China is labelled as ‘debt trap’? This view is not logic or correct!” he tweeted.

Wu Peng, Director-General in the Department of African Affairs in China’s Ministry of Foreign Affairs, also said there was no cause for alarm.

“Which of the Chinese projects in Africa have been confiscated in Africa? None. The hype surrounding Chinese ‘debt trap’ in Africa has no factual basis and is being pushed on malicious grounds,” he said.

Image courtesy: Twitter