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Uganda risk losing Entebbe international airport over Chinese loan

Reckless borrowing has landed Ugandan government in a mess as Chinese lenders reject a request from the authorities to renegotiate the terms of a loan the country secured in 2015 without critical considerations to the toxic clauses attached. The Finance minister told parliament that, “I apologize that we shouldn’t have accepted some of the clauses”

According to local media, the Ugandan Civil Aviation Authority (UCAA) has revealed that, some provisions in the Financial agreement earlier signed with China exposes the country’s international airport, Entebbe and other main assets to a possible takeover by the lender which is the Exim Bank of China.

The eastern African country under the leadership of Yoweri Museveni borrowed an amount of $207 million meant for the expansion of the Entebbe international airport. The loan facility came with 20 years maturity period plus a seven-year grace period.  Unfortunately, in the attached agreement, reports say Ugandan authorities waved immunity on the airport, exposing it to threat.

Efforts by the authorities to seek a renegotiation proved futile. Finance Minister, Matia Kasaija who earlier apologized to parliament for “mishandling of the $207 million loan” indicated that, “the Exim Bank officials made it clear from the onset that re-negotiation and amendment of the loan agreement were not agreeable to them.”

The team sent to China to initiate the re-negotiation request included officials from Works, Foreign Affairs, and Finance ministries. They also added officials from the aviation authority and Dr Chrispus Kiyonga, Uganda’s Ambassador to China

China has so far restricted funding for the commencement of the expansion project on the airport due to claims by the Exim Bank officials that, Uganda violated part of the agreement. However, the Uganda Aviation Authority says in a response to parliamentary query that, “these conditions were not palatable for an international airport of a sovereign State whose operations are dynamic and sometimes unpredictable.”

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