The Chinese Embassy has denied claims the country planned to take over Uganda’s international airport if the nation defaults on its loan.
On Tuesday, 17 November 2015, the Uganda government signed an agreement with Export-Import Bank of China (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.
It has now emerged that the deal signed with the Chinese lenders virtually means Uganda “surrendered” its most prominent and only international airport.
The Uganda Civil Aviation Authority (UCAA) says some provisions in the Financing Agreement with China expose Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.
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.
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.
“I apologise that we shouldn’t have accepted some of the clauses,” Kasaija told members of the committee in response to questions asked by the legislators.
However, reacting to reports on the development, Chinese embassy in Uganda said; “The malicious allegation that ‘Uganda surrenders key assets for China cash’ has no factual basis and is ill-intended only to distort the good relations that China enjoys with developing countries including Uganda.
“Not a single project in Africa has ever been confiscated by China because of failing to pay Chinese loans.
“All loan agreements, including that of the Entebbe Airport Expansion and Upgrading Project, are voluntarily signed by both parties through dialogue and negotiation on equal footing without any hidden terms or political conditions attached.
“Terms of the loan agreement for Entebbe Airport Expansion and Upgrading Project are in full compliance with the prevailing conventions and practices in the international financial market. China firmly supports and is willing to continue our efforts to improve Africa’s capacity for home driven development.”