ON Tuesday, 17 November 2015, the Uganda government represented by the then finance ministry and the Civil Aviation Authority, signed an agreement with Export-Import Bank of China (Exim Bank) to borrow U$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 re negotiate the toxic clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in limbo.
According to the Daily Monitor of 25 November 2021, the Ugandan government waived international immunity in the agreement 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 re negotiate 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.
“I apologize that we shouldn’t have accepted some of the clauses,” Kasaija told members of the committee in response to questions asked by the legislators. There were also questions over the interest rate that was set by the China Exim Bank for the funds placed in an off-shore Standard Bank account that was used as collateral for the project.
Three weeks ago, Uganda Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises raised concern over terms of the loan acquired to upgrade and expand Entebbe International Airport.
Committee members led by chairperson Joel Ssenyonyi demanded the Minister for Finance, Planning and Economic Development Maria Kasaija, to explain whether due diligence had been made prior to government signing the agreement with the Chinese bank.
Source: Punch Nigeria