Has Uganda lost Entebbe airport to China?

Against a backdrop of default on its debt to the Export and Import Bank of China (Exim Bank), is Uganda on the way to losing Entebbe airport?

This Saturday, the Ugandan press deplored the fact that China got its hands on Entebbe airport. While the Ugandan government has denied the rumors, Ugandan Finance Minister Matia Kasaija has already apologized to Parliament for "the mismanagement of the Entebbe airport expansion loan". For its part, the President Museveni refutes this episode.

The story begins with a $ 207 million debt clause. According to a report released by Allafrica, “the Ugandan government signed an agreement and among other things lifted immunity for its sovereign assets raised questions about the level of scrutiny and due diligence bureaucrats conduct before engaging the country internationally ”.

The Ugandan state had effectively entered into a membership contract for the benefit of the Chinese Exim Bank, promising the cession of the airport and other sovereign assets in the event of non-repayment of the debt.

The loan had a seven-year maturity, but it now appears that the deal signed with the Chinese bank said Uganda would have no recourse once the deadline had passed. In March, Ugandan President Yoweri Museveni sent a delegation to Beijing for renegotiations with the Chinese government. In vain.

The debt trap, China's favorite strategy

Today, therefore, Uganda is seeking an understanding with China and changing the terms of the agreement to ensure that it does not lose its only international airport. But not only. Among the clauses the Ugandan government wants to change is the need for the Uganda Civil Aviation Authority (UCAA) to seek approval from the Chinese lender for its budget and strategic plans.

Another clause would state that any dispute between Exim Bank and Uganda should be resolved by the China International Economic and Trade Arbitration Commission. The UCAA spokesperson and Exim Bank chief executive denied in separate tweets that the Chinese lender had taken over the airport.

China's "New Silk Road" plans have been the subject of controversy around the world. In Sri Lanka, the government agreed in 2017 to lease a port to a company run by Chinese company China Merchants Port Holdings for 99 years in exchange for $ 1,1 billion. In Pakistan, China's plan to build a seaport, roads, railways, pipelines, dozens of factories and the country's largest airport has yet to come to fruition due to blackmail against a deal energetic.

In Kenya, in 2018, the state almost had to give up the port of Mombasa to China because of an unpaid debt of 6,5 billion dollars. The same year, in South Africa, the state-owned Eskom had to part with a power plant worth 2,5 billion dollars for the benefit of the Chinese company Huarong Energy. The South African state has also prepared an appeal to try to cancel the seizure due to a corruption case surrounding the loan and targeting the government of Jacob Zuma.