By Faith Nyasuguta
For days now, Uganda’s Entebbe International Airport has been in the limelight over an alleged impending takeover by China following a loan default.
The Entebbe International Airport is Uganda’s major aviation hub that handles over 1.9 million passengers. It is the country’s only international airport.
The last time the airport hit headlines was 45 years ago when Israeli forces stormed the airport to rescue hostages in what is seen as the most incredible anti-terror operations in history.
China could soon take over the Entebbe International Airport following Uganda’s inability to repay a loan that was ‘strangely’ planned for its expansion.
In 2015, the East African nation is reported to have received a $207 million loan from China’s Export-Import (EXIM) Bank, with a 2 per cent interest rate on disbursement. The loan was afforded a two decade maturity period and a seven-year grace period.
As reported by some local media outlets, the Ugandan government dropped the international immunity clause in exchange for the financing and attached its only international airport.
What this means is that China can take up the Entebbe International Airport devoid of international arbitration.
Anticipating a looming crisis, a group of Ugandan officials was sent to China in early March this year to attempt renegotiating the loan agreement’s terms.
Ugandan envoy to China, Chrispus Kiyonga, spearheaded a joint delegation from the Foreign Affairs, and Finance ministries, as well as Uganda Civil Aviation Authority (UCAA) and the Attorney General’s Chambers.
It was reported that Exim Bank executives denied altering the signed Financing Agreement’s provisions and informed the Ugandan delegation that any attempts to alter it would create a negative precedent.
The lenders, however, advised Kiyonga and his staffers to accept “friendly consultations” from time to time, in an effort to guarantee the successful implementation of the airport expansion project.
That is how the contract went down and China denied changing the agreement’s initial terms.
At the same time, the Ugandan Civil Aviation Authority mouthpiece Vianney M. Luggya has maintained that the country is not selling its airport to China for “cash”.
“The Ugandan government is unable to give away such a valuable national resource. We’ve said it before, and we’ll say it again: it hasn’t happened. There’s not a shred of truth in it.”
Vianney M. Luggya
He tweeted that Uganda is well within the stipulated 7-year grace period of the loan.
In the same vein, the Chinese Embassy in Uganda has denied claims of a takeover, noting that the “hype” surrounding China’s “debt trap” in Africa has “no factual substance.”
“Why is money provided by Western countries to developing countries referred to as ‘development assistance,’ whereas money offered by China is referred to as a ‘debt trap?’ This viewpoint is illogical and incorrect!” Wu Jianghao, China’s Assistant Minister of Foreign Affairs said.
CHINA’S SWOOP ON AFRICA
A recent report on the military capabilities of world powers shows that China’s military equipment is now employed by over two-thirds of African nations.
Interestingly, Uganda is among 10 countries which have become “emergent customers” for Beijing’s arms exports since 2005. In addition, the Ugandan army gives substantial security to Chinese companies.
Yoweri Museveni, Uganda’s long-serving president, spurred outrage in 2019 by meddling in a key project’s bidding process and picking the Chinese business he desired. In the same year, Uganda denounced the pro-democracy protests in Hong Kong.
For a while now, Museveni has praised China as the right partner in large-scale projects in his nation.
He has further revealed that he hopes that projects including power plants that produce more electricity than Uganda requires could break down “bottlenecks” to prosperity.
Some Ugandans are however becoming more resistant to Chinese funding as debt in other African nations is ballooning to alarming levels.
According to critics, the money (loans) will continue feeding corruption. In a confidential letter published in the local media in 2018, Finance Minister Matia Kasaija wrote to Museveni saying:
“Given what is happening in our peer countries in terms of China debt, we firmly believe we should protect our assets against a prospective takeover.”
The letter also mentioned the obligation to put money in escrow accounts in China as collateral, as well as the claimed failure of Chinese-run companies to recruit Ugandans and use locally obtained materials like cement.
Critics have also said that it appears that China is successfully boosting its Party-Army model in Uganda, sparking deep concerns on a possible change in the political system in the future.
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