We were the first to sound the alarm about the Chinese debt trap hidden in the Belt and Road Initiative, and today there are reports that Uganda has fallen into this trap, and is now threatened with losing Entebbe Airport (the only international airport in Uganda) to fall into the hands of the Export-Import Bank of China, due to its failure to repay a loan. Its value is 207 million dollars.
In 2015, Uganda borrowed about $207 million from the Export-Import Bank of China to develop and expand Entebbe Airport. The terms of the agreement stipulated that if Uganda defaulted on the loan, the airport would be transferred to the bank. In addition to this, China has set conditions that include prior Chinese approval of the airport’s plans and budgets. . The agreement also included that if there were disputes between Uganda and the bank, they would be resolved through the Chinese International Trade and Arbitration Commission.
Currently, a Ugandan delegation is visiting Beijing to persuade China to amend these terms. According to the Ugandan Civil Aviation Authority, if the Chinese side refuses to amend these terms, which is likely according to the Ugandan side, the airport will be transferred to the Chinese bank. In a related context, Sri Lanka has granted a 99-year lease for a port to an alliance. Chinese in exchange for a loan worth $1.1 billion.