Exim Bank, China’s largest lender has imposed “aggressive repayment terms” on the government of Uganda in an effort to recover a 200 million USD loan used to upgrade Entebbe International Airport.
In the latest revelations, the government of Uganda is now required to channel all the revenues collected from the airport into a joint bank account held by the lender. The lender will then determine how the cash will be used.
At the same time, the government of Uganda will not be allowed to use any money deposited to the joint account for any public means until a percentage of the loan has been deducted.
According to a report by AidData, the Ugandan government will also sit and let the Chinese decide the budgets for the airport. Entebbe International Airport is the only international airport in Uganda.
Already visitors arriving at Entebbe have said the Chinese are the ones manning the entry points of the airport as well as collecting the revenue. The revelations come even as the government of strongman Yoweri Kaguta Museveni tried to deny the claims.
Exim Bank is the main Chinese Bank that has been lending heavily to African countries to invest in infrastructure. Other countries have criticized the Chinese government for using the bank to “colonize” Africa.
In Kenya, Exim Bank gave the loan that was used to construct the Standard Gauge Railway (SGR) from Mombasa to Nairobi. The agreement between the government of Kenya and the Chinese lender has never been released to the public.
Several sources including the office of the Auditor General have confirmed that for the Kenyan loan, the Port of Mombasa was used as security. This means in the event of default, the Chinese will take over the running of the port.
President Uhuru Kenyatta promised to make the agreement public but forgot as soon as the cameras were switched off.