Uganda is on the verge of losing its only International Airport and other government assets to China over a loan it secured in 2015.
This is after the country government failed to reach an agreement with its lander in china of $207 million given to the country to expand the Entebbe International airport.
On 17 November 2015, the Uganda government, represented by the finance ministry and the Civil Aviation Authority at the time, signed an agreement with the Export-Import Bank of China (Exim Bank) to borrow U$207 million at two percent upon disbursement, with a maturity period of 20 years including a seven-year grace period.
The deal signed with the Chinese lenders virtually means Uganda “surrendered” its most prominent airport to China if it can’t pay back.
The Uganda Civil Aviation Authority (UCAA) who raise the alarm said some provisions in the Financing Agreement with China lender exposed Entebbe International Airport and other Ugandan assets to be attached and taken over by its lenders upon negotiation in Beijing.
UCAA managing director, David Kakuba, also warned that failure to amend the clauses could expose government assets to attachment and take over by China.
It also emerged that China has rejected recent pleas by Uganda to renegotiate the toxic clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in limbo.
According to the Daily Monitor of Uganda, the Ugandan government waived international immunity in the agreements it signed to secure the loans, exposing Entebbe International Airport to take over without international protection.
In desperation, Uganda in March 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 apologized to parliament for the “mishandling of the $207 million loan” from the China Exim Bank to expand Entebbe International Airport.
East Africa also reports that the country’s Attorney General Kiwanuka Kiryowa played down the fears of the airport takeover says there is no cause for alarm.
“When you borrow money, your obligation is to pay. If you do not pay, the other party can take you to court, in which case this would be CIETAC.
“Let everyone do their part. The airport makes money and will meet its obligations.”
The Airport is the only only international airport in Uganda it was built in 1972 and handles over 1.9 million passengers per year, Legit reports.