China signed an agreement with the Ugandan government in November 2015 to borrow $207 million at two per cent
By Ishaya Ibrahim, News Editor
Nigerians have warned President Muhammadu Buhari to reconsider his interest in taking Chinese loans after it emerged that Uganda’s only airport has been taken over by China over unserviced debts.
Uganda surrendered its only airport and other critical assets to the Chinese due to its inability to service or repay its loans, according to reports which put Ugandan indebtedness to China at $207 million.
The Ugandan government signed an agreement with the Export-Import Bank of China in November 2015 to borrow $207 million at two per cent upon disbursement. The loan had a maturity period of 20 years including a seven-year grace period.
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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 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 renegotiate the toxic clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in limbo.
According to the Daily Monitor, the Ugandan government waived international immunity in the agreement signed to secure the loans, exposing Entebbe International Airport to take over without international protection.
Nigerians have, however, expressed worry that Uganda’s fate may befall the country if it reneges on its debt repayment to the Chinese.
As at March 2021, Nigeria owes China about $3.402 billion, according to Debt Management Office (DMO). The loan covers 11 loan facilities from the China Exim Bank since 2010.
In total, Nigeria has agreed $5.6 billion in loans with China. But as of March 2020, Beijing had disbursed over $3 billion
Nigeria uses the Chinese loans to develop critical infrastructure including railways, one of which goes to Maradi rail in Niger Republic being built by the Buhari government.
As at June 2021, Nigeria’s debt profile stood at N35.465 trillion.
Social activist, DJ Switch said leaders in Africa should be ashamed as they have pauperised their population due to loans taken from countries like China.