China to take over Uganda's main assets over unpaid rising huge debt | African Stand

Ugandan government is now at risk of losing its main state assets to China over unpaid huge increasing loans from Chinese government.

But according to Ugandan government, the growing debt is sustainable, and the country is not at risk of losing state assets to China, the country’s finance minister, Matia Kasaija.

African Stand reported in December last year that Kenyan government risks losing the lucrative Mombasa port to China if the country fail to repay huge loans advanced by Chinese lenders, but both Chinese and Kenyan officials have dismissed that the port’s ownership is at risk.

Others think Chinese government are in some ways gangsters, taking over mines all over Africa, sending thousands of Chinese workers, destroy environment, bring the minerals such as copper, sink, gold, silver, diamonds etc home, and make deals with corrupt politicians to plunder the countries.

“The case is one of the examples of China’s ambitious use of loans and aid to gain influence around the world and of its willingness to play hardball to collect,” says the New York Times in December 12, 2017.

At a time in Somalia when local fishermen are struggling to compete with foreign vessels that are depleting fishing stocks, the government has granted 31 fishing licenses to China.

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But Uganda’s auditor-general warned in a report released this month that public debt from June 2017 to 2018 had increased from $9.1 billion to $11.1 billion.

The report — without naming China — warned that conditions placed on major loans were a threat to Uganda’s sovereign assets.

It said that in some loans, Uganda had agreed to waive sovereignty over properties if it defaults on the debt — a possibility that Kasaija rejected.

“China taking over assets? … in Uganda, I have told you, as long as some of us are still in charge, unless there is really a catastrophe, and which I don’t see at all, that will make this economy going behind. So, … I’m not worried about China taking assets. They can do it elsewhere, I don’t know. But here, I don’t think it will come,” he said.

China is one of Uganda’s biggest country-lenders, with about $3 billion in development projects through state-owned banks.

In December 2017, the Sri Lankan government handed its Hambantota port to China for a lease period of 99 years after failing to show commitment in the payment of billions of dollars in loans.

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Also in September 2018, African Stand reported that China was taking over Zambia’s state power company and Kenneth Kaunda International Airport over unpaid debt rippled across Africa, despite government denials.

China’s Exim Bank has funded about 85 percent of two major Ugandan power projects — Karuma and Isimba dams. It also financed and built Kampala’s $476 million Entebbe Express Highway to the airport, which cuts driving time by more than half. China’s National Offshore Oil Corporation, France’s Total, and Britain’s Tullow Oil co-own Uganda’s western oil fields, set to be tapped by 2021.

Economist Fred Muhumuza says China’s foot in Uganda’s oil could be one way it decides to take back what is owed.

“They might determine the price, as part of recovering their loan,” he said. “By having a foot in there they will say fine, we are going to pay you for oil. But instead of giving you $60 a barrel, you owe us. We’ll give you $55. The $5 you are paying the old debt. But we are reaching a level where you don’t see this oil being an answer to the current debt problem.”

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