FACT CHECK: Is China Moving To Seize Ugandan Sole International Airport?

Several reports have it that Uganda is set to lose its’ only international airport to China over unpaid loan by the former.

The country’s only international airport, Entebbe International Airport, was staked when Uganda on Tuesday, 17 November 2015 by the Museveni-led Ugandan government signed an agreement with Exim Bank China to borrow $207 million at two per cent upon disbursement.

According to Sahara reporters, Chinese lenders, the Export-Import Bank of China or Exim Bank, has taken possession of the Airport alongside other assets in the country over negligence to settle the debt.

Similarly, wionews.com reports that Ugandan President Yoweri Museveni sent a delegation to Beijing with the prospects of renegotiating the terms.

The visit, according to the report, was futile because Chinese authorities declined to approve any modifications to the deal’s original parameters.

However, a fact check conducted by Nexus News, sifted the truth out the matter.

To start with, it has been immediately refuted by China, allegations that it had moved to seize Ugandan assets in relation to the debt.

Uganda President Yoweri Museveni shakes hands with his Chinese counterpart Xi Ji-Ping. (Photo: AFP)

According to the Chinese embassy in Uganda, citing to a local headline, said late on Sunday: “The malicious allegation that Uganda surrenders key assets for China cash has no factual basis and is ill-intended only to distort the good relations that China enjoys with developing countries including Uganda.”

“Not a single project in Africa has ever been confiscated by China because of failing to pay Chinese loans.”

Nexus News gathered in its’ findings that  Uganda loan was obtained in 2015 from China’s Exim Bank, one of the many credit lines Uganda has amassed from China over the last 15 years to fund infrastructure projects including roads and power plants.

The loan agreement has not been publicised. Ugandan Lawmaker Joel Ssenyonyi, who chairs the committee that performed the parliamentary probe, said it gives Exim Bank authorization powers over the airport’s annual budgets and that the loan terms allow China to “grab” the airport in case of default.

“Revenues from the airport’s operations are to be deposited in an escrow account where all withdrawals have to be sanctioned by Exim Bank” Ssenyonyi told Reuters on Monday, referring to the agreement.

Also, the agreement demands that any dispute arbitration or court proceedings to take place in China under Chinese law, Ssenyonyi added.

“So Uganda is locked out entirely, the contract is one-sided,” Ssenyonyi said.

Earlier this year,  Uganda attempted to renegotiate the loan terms but had been brushed off by Exim Bank, Senyonyi said, referring to disclosures to the committee by the finance minister, Matia Kasaija.

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