News - November 28, 2021

Is Uganda’s Airport Take-over by China a Cause for Worry?

China has loaned $148 billion for infrastructure projects to the continent, which makes them stand as the biggest bilateral lender.

November 28, 2021

3 min read

The recent take-over of Uganda’s Entebbe International Airport by Export-Import Bank of China raises concerns on the intention of Asian superpower in Africa.

Africa’s rising debt to China and the economic challenges resulting from the COVID-19 pandemic is stalling the flow of funds for ongoing infrastructure development projects in Africa.

Between 2000 and 2018, China has lent $148 billion for infrastructure projects to the continent. China is currently the biggest bilateral lender in 32 African countries. Among the countries indebted to China is Angola with $21.5 billion in 2017, Ethiopia with $13.7 billion, Kenya with $9.8 billion, the Democratic Republic of Congo with $7.42 billion, Zambia with $6.38 billion, and Cameroon’s $5.57 billion debt.

Africa’s largest economy, Nigeria, isn’t left out, with debt to China increasing by 136% between 2010 and 2015. In 2020 the country spent $195 million as debt repayment to China.

How China Was Able to Take-over Ownership of Uganda’s Airport

An agreement was signed by the President of Uganda, Yoweri Museveni and China’s Exim Bank on Tuesday, 17 November 2015, to borrow $207 million at 2% interest upon disbursement.

The loan had a 20-year maturity time with a seven-year grace period. It now appears that Uganda’s failure to meet the terms will see the nation surrender its only international airport to China.

A report from allAfrica states that the Ugandan government signed an agreement waiving immunity for its sovereign assets, which raises concerns about the level of scrutiny and due diligence that bureaucrats do before committing the country to international obligations.

The airport, which was built in 1972, is at 75.2% with two functional runways.

China’s exploration of Africa, somewhat mirrors the idea of neo-colonialism. We can only speculate which African country will be next to experience a foreign takeover.