Uganda, in eastern Africa, is one of the poorest countries in the world. China is said to be adamant in its decision to acquire the country’s only international airport as Uganda has not repaid its loan to China.
Faced with economic problems, Uganda decided to borrow from abroad in 2015. Negotiated with China accordingly. The Chinese government also agreed to lend to Uganda. It also agreed to mortgage assets, including Entebbe Airport, in exchange for the loan.
Accordingly, the Ugandan government’s finance and civil aviation departments went to China in an attempt to obtain a loan. Following this, a loan agreement was signed between the Government of Uganda and the Exim Import Bank of China (EXIM) on November 17, 2015.
The Chinese government agreed to a $ 207 million loan of 20 years with a grace period of 20 years and a grace period of 7 years with two percent interest.
Uganda, meanwhile, seems unable to repay its debt. The dangerous condition of the loan agreement is that China may take over Entebbe Airport if it fails to repay the loan.
Following this, Ugandan President Yoweri Museveni sent a high-level delegation to China. China has denied that it can relax its terms of the deal while negotiating the removal of that dangerous clause.
This ensures that Uganda loses its only international airport to China. And since there is no international protection in this loan agreement, it seems that Uganda cannot seek the help of other international organizations.
Uganda’s Finance Minister Mathias Kasaija last week apologized in parliament for a breach of a loan agreement with China.
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