The Exim Bank of China is set to seize Uganda’s main airport, the Entebbe International Airport for the African country’s inability to repay a loan of $207 million.
Uganda had signed a loan agreement with the Chinese bank with repayment terms attached to its only airport.
A report says that the agreement stipulates that if the terms of the loan are not met, Entebbe International Airport and other assets will be forfeited.
The assets will be acquired by China during loan arbitration if the Ugandan government failed to honour its commitment.
Uganda is so far, unable to repay its debt in line with the terms of agreement. Reports say that President Yoweri Museveni had sent a delegation to Beijing in the hope of renegotiating the toxic clauses in the contract but this has not yielded any result.
The East African country, represented at the time by the Ministry of Finance and the Civil Aviation Authority, signed on the 17th of November, 2015, an agreement with the Export-Import Bank of China (Exim Bank), to borrow $207 million at 2% upon disbursement.
The maturity period was put at 20 years, including 7 years of deferred amortisation.
Daily Monitor of Uganda states that the contract terms also include practically “ceding” its most important airport to the Asian country.
According to the newspaper, “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 delegation to negotiate the clauses of the initial agreement, initiated by the Ugandan government, the latter finds itself with its back to the wall.
With this complicated situation, the Ugandan Minister of Finance, Matia Kasaija apologised to the country’s parliament for whit it describes as the “mismanagement of $207 million loan” from the Trust.
He added that, “I apologise that we should not have agreed to certain clauses,” Kasija told committee members while responding to questions by the awmakers.
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