The Uganda government represented by the finance ministry and the Civil Aviation Authority at the time, signed an agreement with Export-Import Bank of China (Exim Bank) to borrow U$207 million at two per cent upon disbursement; with a maturity period of 20 years including a seven-year grace period.
Details have emerged that the deal signed with the Chinese lenders virtually means Uganda “surrendered” it’s most prominent airport.
The Uganda Civil Aviation Authority (UCAA) announced that some provisions in the Financing Agreement expose Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.
According to HourlyHits, China has also rejected moves by Uganda to re negotiate the clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in a state of quagmire
HourlyHits quoting Daily Monitor of Uganda, said that the Ugandan government waived international immunity in the agreements it signed to secure the loans, exposing Entebbe International Airport to be taken over without international protection.
In desperation, Uganda in March sent a delegation to Beijing hoping to re negotiate the clauses but the officials came back hitting a brick wall as China would not allow the terms of the original deal to be varied.
Last week, Uganda’s Finance Minister Matia Kasaija reportedly apologized to Ugandan parliament for the “mishandling of the $207 million loan” from the China Exim Bank to expand Entebbe International Airport.
“I apologize that we shouldn’t have accepted some of the clauses,” Kasaija told members of the committee in response to the question over the interest rate that was set by the China Exim Bank for the funds placed in an off-shore Standard Bank account that was used as collateral for the project.
Built in 1972, Entebbe International Airport is Uganda’s only international airport and handles over 1.9 million passengers per year. Its seizure by China would further land a devastating blow to president Museveni’s autocratic rule.
Museveni, who came to power on the back of an armed uprising in 1986, has defied the political laws of gravity which have visited other long-serving dictators in the region.
The 77-year-old’s has managed to maintain his grip on power through a mixture of encouraging a personality cult, employing patronage, compromising independent institutions and sidelining opponents.
During the last election a year ago when he addressed the issue of stepping down, he asked: “How can I go out of a banana plantation I have planted that has started bearing fruits?”