The Exim Bank of China iss about to seize Uganda’s main airport, Entebbe International Airport for non-repayment of a $207m loan.
Uganda signed a loan agreement with the Chinese bank which had repayment terms attached to its only airport. According to reports, this agreement stipulates that in the event of non-reimbursement, Entebbe International Airport and other Ugandan assets will be seized.
Naija News understands that these assets would be taken over by Chinese lenders during loan arbitration if the Ugandan government failed to honour its commitment. The East African country, therefore, seems unable to repay its debt according to the contractual terms. The news outlet also indicates that President Yoweri Museveni had sent a delegation to Beijing in the hope of renegotiating the toxic clauses of the contract, but to no avail.
The Ugandan government, represented at the time by the Ministry of Finance and the Civil Aviation Authority, signed on November 17, 2015 an agreement with the Export-Import Bank of China (Exim Bank) for borrowing $ 207 million at 2% upon disbursement; with a maturity of 20 years, including seven years of deferred amortization.
According to the contract, Uganda practically “ceded” its most important airport to China because, according to the Daily Monitor of Uganda, “the Ugandan government has lifted international immunity in the agreements it signed to guarantee loans, exposing Entebbe International Airport to take over without international protection ”. With the failure of the mission to negotiate the clauses of the initial agreement, initiated by the Ugandan government, the latter finds itself with its back to the wall.
In view of the complicated situation, Ugandan Finance Minister Matia Kasaija apologized to parliamentarians for what he called the “mismanagement of the $ 207 million loan” from the Trust. China Exim Bank to expand Entebbe International Airport. “I apologize that we should not have agreed to certain clauses,” Kasaija told committee members in response to questions posed by lawmakers.