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China Denies Taking Over Uganda International Airport Over Loan Default

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Chinese authorities have poured cold water on claims of the Asian country taking over Uganda’s sole international airport over an alleged failure of the African nation to pay back a $200 million loan it borrowed for the expansion of the facility.

According to a report by Reuters, a parliamentary probe carried out in October suggested that China had imposed onerous conditions on the loan terms, and is to oversee a potential forfeiture of the airport in case of default.

The report sparked off a volcano of public outrage especially in the African continent, where many nations owe China so much money in loans.

However, the Chinese embassy in Uganda, said on Sunday that, “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.”

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

Prior to the recent outrage, western countries have often accused China of luring poor countries into taking loans they may not unable to pay, a situation described as “debt traps”.

The Uganda loan was reportedly secured back in 2015 from China’s Exim Bank, a foremost credit line through which Uganda has acquired loans from China over the last 15 years in a bid to fund infrastructure projects like roads and power plants.

However, the loan agreement has never been made public.

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Lawmaker Joel Ssenyonyi, who chairs the committee that conducted the parliamentary probe, described the loan as a one-sided affair where Uganda is blocked out.

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

Senyonyi also stated that Ugandan had attempted to renegotiate the loan terms this year but has been rebuffed by Exim Bank, citing disclosures to the committee by the Finance Minister, Matia Kasaija.

Meanwhile, fears have been rife that Nigeria could be faced with similar situations following a huge amount of loans secured by the Muhammadu Buhari-led government from the Asian country.

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The Committee on Treaties, Protocols, and Agreements of the House of Representatives had in July 2020 expressed fears that the government was signing off Nigeria’s sovereignty to China in loan agreements.

Part of the agreement in a Galaxy Backbone $400 million loans to build and operate the National Information and Communication Technology Infrastructure reads;

“The borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.”

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