Topic: Another One Bites the Dust: Entebbe Int. Airport falls to China's Debt Trap (Read 259 times)

This is my first time of hearing or seeing a story like this. I never really used to imagine that such things can still happen at this time. Anyways there's no other way that China will be getting their money back if not by during this. But that gets me wondering whether they are going to be in charge of that airport for good now, it is something that isn't just going to be for a while until they are able to recover the money that they loaned to the country?

Then another thing is, getting that all these countries should stop taking loans from China? Is really bad for them, cuz they're not even being productive with the loss that they're taking. Rather than just keep taking loans all the time and at the end of the day they are not even achieving anything apart from more and more debt to pay. So, it is of no use for them to be taking loans out all. And come to think of it ,most of these third world countries has leaders who don't take their responsibilities serious, they are just good at money laundering and that's all.

I see your point, however context needs to be taken into account in order to better understand what is happening, I have always thought to be wrong that a government can indebt itself beyond what they can actually pay, because now you need future generations of people and other governments to pay for your mistakes, and when we add the huge level of corruption that we see in some of those countries it is fair to consider if that loan was actually used to help people or it is in the bank accounts of corrupt politicians, which makes this a great injustice for the people that have to pay for this while those politicians suffer no repercussions for their actions.

I did not understand what you mean by the airport servers 1.9 passengers every year, what kind of metric is that  . When it comes to loan trap, China was offering these loans to many countries and the risk of surrendering them was inevitable if they are not able to follow the terms.

It is simple, if you took a loan, you must not default the terms, these developing countries was not able to get loans from any central banks globally and China was willing to give them at a premium cost and they know the risk of defaulting and China took the chance knowing they would have a control over a property wherever they invest and they have made billions of investment all over the world especially in Africa and Europe.

There are two methods that Uganda could have used here, either they just let China take over and realize the fact that another nation is now controlling their airport but they could get more loans in the future and grow even bigger or they have the possibility to nationalize it if they want to. I mean what is the worst that could happen?

You just do not allow china to control and legally disband any foreign ownership if you want to. Sure there could be consequences like no foreign investor would want to come again, and that could result with more poverty but at the same time we are talking about having the national freedom not withheld by another nation. So it is a weird dilemma, china has all the rights here and if Uganda didn't pay then consequences are normal but I am not entirely sure if I would want something like this to ever happen to our nation neither.

Agreed with this. I don't know why the western press is unfairly targeting China. If Uganda paid the loan as per the obligation, then there would have been no issues. China gave out loans to countries which have zero chance of getting any money from the western nations. Given this, I would expect Uganda to hold on to their part of the bargain. Western nations have no right to blame China, when they have colonized poor countries in Asia and Africa for many centuries. First they should pay repatriations, and after that they can complain about China.

I am afraid that my country (Philippines) is next if the next president is dumb as hell. Hopefully things go smoothly this election and no cheating will be occurred. China is slowly dominating the SEA countries and in terms of military might there no country in the region that could match it up. This money trap is some that have been planned ages ago and well executed, if these goes steady, maybe all the SEA countries would be Chinese citizens whether they like it or not.

Correct me but the agreement of both Uganda and China is the loan will be paid for 20 years with a grace period of 7 years but this happened.
Well, the China has the right to do it so this is the main problem of the countries they indebted with. Uganda is one of the 160+ countries that has debt to China and this put China as the largest creditor in the world.

What I'm afraid is they will do this to other countries as well and slowly they will try to conquer the world. Kinda like a conspiracy for me but I think that they are on their way to do it. :X

If they knew that it was unfair then why they still agreed on that? That's why I said it's not their fault although they are still to be blame though since they were taking advantage of the country's situation. Both country has faults and I think we can blame each one of them.

But the question is, who would stop China from doing something like this? Do you believe a UN can stop them from doing that when in fact they don't listen to the other nations advice.

Who's to be blamed, the one who set the trap or the one who fell victim to it? I'm not saying Uganda is 100% clean and innocent in this case but surely I wouldn't put the entire blame on them for not scrutinizing and signing a contract full of unfair clauses.


Trying to keep silent against injustices committed by a powerful institution, country, ethnicity, religion, and so on is so 18th century. Nothing is demonized here except the demon.

I think it's not their fault why other countries fallen into this kind of trap since, first of all it's the politicians who agreed to sign the contract with/without reading the terms and conditions thoroughly. It's the government who are handling the funds that the China lend to them and I think China knew it all along if a country is full of corrupt officials, they will soon owned something from that country.

It surprise me to see such loan sharks alike in the streets are now lurking in some other countries to watch their prey fall from their traps. I don't know how the people/politicians/government would stop this but they seemed to know how this works but they just continue even though they knew the risk.

Wow, this is a big loss... My country's actually considering loans from China, but I really hope we won't take them because being risk-averse about loans is a part of our culture. There are many companies in my country which basically offer micro loans (up to $1.8k), no questions but an ID proof asked, and then they have crazy percentage you're supposed to pay up, and it quickly gets even crazier if you miss any payments. What China's doing looks to me like the same thing buy on a scale of a whole country: it's easy to take this loan, compared to other loans, but it's also very easy to lose something solid because of the conditions.

They are exploiting those small countries who have corrupt leaders so that they can own something good which can help them on I think spying the nation and that take over of their airport is kinda a national threat for them since china can monitor their movements and that is not good to them. I do hope no other country will fell in this debt trap and those country needs money doesn't think about taking those loans to china since we already know what they do next if a country cannot pay their obligation to them.

China has been using this tactics to penetrate into third world countries. They issue them loan and when they are not able to pay up for the loan that they have been issued, China will come in. I have been seeing news like this about China’s plans to take over these countries which is very cruel. I really don’t know why China would be this wicked, and just like the OP has said, they really needs to be stopped.

Funny enough, most of these African leaders are like this and are only good at stealing from the country’s treasury. I wouldn’t be surprised that the money that was loaned to this country (Uganda) was not used for the purpose of which it was borrowed. It can as well be possible that their leaders has mismanaged the money, and it has now led to this problem.

I don't understand why sign the agreement hastily and think of renegotiation later. Those who signed on Uganda's behalf should take the hit, as they are the ones who are directly responsible for the forfeiture of the airport to the Chinese. Most probably they already received handsome sums on underground meetings, and them trying to renegotiate is just a way to make it seem like they still care.

China will surely employ this strategy on poor African countries with lots of corrupt officials. It's the easiest way to get what they want without being questioned by other governments since there is an agreement that is set upon by both parties.

To be honest, I actually believe this is going to be the case for quite a lot of countries and organizations that are indebted to China, China are doing what they need to do to be the number one economy in the world, and if you look at it from all angles you can't really blame them, they are willing to grant you loans and add clauses that will favor them in the end, should in case you do not pay, but the country also has the right to reject such clauses and by extension, reject the loan outrightly.

But many of these countries and very corrupt, they are mostly underdeveloped and developing countries, and when they take this loans, they hardly put it into good use, making it impossible for them to pay back. I'm of the impression that if some of this money borrowed from China is actually used for the development of the country taking the loans, then they could actually have a way to pay back, but majority of the money is embezzled, and then in the end it all favors China. The Chinese government may actually be giving this loans knowing fully well this countries would not be able to pay back which is wrong in a way, but the fact remains that the erring country broke the terms of an agreement and rightfully have to lose something.

Very strange. This looks like economic colonization something of this sort was also done by Britishers in their time, they just used their military along with that, China is practicing the same tactic, just adding the crisp of hostile takeover to this transaction. The strangest thing is that rest of the countries are absolutely quiet towards such practices of China. Many ports of Asia have already fallen prey to this strategy now it's Africa's turn I suppose.

This could also be a case of the Chinese government dumping their dollars in a more discreet fashion, after all they are in a difficult position, they are exporting products and receiving fiat for those products, but fiat is suffering high inflation, so what do they prefer? To keep their fiat which losses value every day or do they loan those dollars to another government they know cannot pay and get an airport in return? Under that view the airport seems preferable to the fiat to me.

Yeah lol, sell all your coins and invest in African airports, current trading symbol is O o.

As for the other part is pretty simple, you need to think out of the box a bit, and the first thing is that you need to see if this was indeed a good idea for them or, like everyone does they have made a mistake, lending money for something that was not worth it, like bad collateral.
The Chinese investors and their government are non-omnipotent beings knowing everything and anticipating the future, they have made a lot of errors in investments, they've lost billions also, look at what happened in Venezuela when they've met corruption on a different level.

It's a numbers game, you need to spend $100 and make sure you make $101, so you can lose 10 if you gain 11 from another source.

It was to be expected, China laid it out already and the people that got into their trap willingly got in so it's not that surprising that these trap would get it's prey already. I mean those countries that's going to be falling for this are those developing countries, last I've heard is that China has a lot of debt released in African continent so that means that they'll eventually get a foothold on that continent not to mention their Belt Road Project will be a big economic help to them.

So basically China giving loans to African countries is a bad thing?
Then why can't the African countries borrow money from somewhere else?USA,France,UK,International Monetary Fund,World Bank?Is China the only option for borrowing money?
What makes China loans so irresistible for the African countries,since the conditions of that loan seem to be too restrictive for the country,that is borrowing the money?
AFAIK,Uganda is one of the more economically and technologically advanced countries in central Africa.Can't they repay a 200 million dollar loan?The amount isn't that big.
Giving the airport to China isn't such a horrible thing.The government of Uganda can decide to nationalize the airport.This will make the Chinese angry,but the western countries might support such decision.

Oh my God, isn’t that is horrifying thing?
I mean handing over whole airport to another country is like creating safe landing zone for their military troops, armies getting over in and out easily from this black hole!

How come no one is seeing it as something suspicious as this? Considering china is the one who introduced pandemic, it’s military forces are highly active on Indo China border, various naval activities and now this the Uganda incidence.

Man this looks like biggest plot of century to invade in other countries.

They know the risk of what action they do and since the government didn't pay what they owe to the government of china then this is the exchange of their own negligence. China is known unto this and they used the Debt trapped methods to acquire more assets and make their country stronger so for other small country out their this should be the reminder to them to not go to the last option and do some agreement regarding on taking some huge debt on china since they will lose a piece of their country if they can't pay them on their set timeline or base on their agreements.

I would be more concerned with china buying up and controlling stocks of rare earth minerals in africa. They're said to own the lion's share of cobalt in the region. Which is tied to the mass manufacture of lithium batteries.

Brands like tesla have reportedly taken steps to design their future line of lithium batteries to need little or no cobalt in an effort to insulate themselves from resources which are centralized and heavily regulated. There have been campaigns to tie tesla batteries to child slavery in african cobalt mines, which could be another motive behind the move.

What would be a motive behind wanting to control airports in africa or abroad? If you owned and controlled an international airport in africa, what would you do with it? With the cost of oil on a steep incline, it seems air travel will be significantly more limited or expensive in the future. And so I wonder what their motive is for wanting such a thing. Could airports in africa be the next bitcoin?

Which has a very simple answer, the one taking the money is not the same as the one that has to pay the debt. In essence it is illegitimate debt that tyrants use to get the funds and send them to their accounts in tax havens while the country is left to pay the debt. China know this perfectly well and their Gov. is super-happy to use to their advantage the corruption and disarray of others to their own advantage. And i think it is not legit, but a country that is corrupted at large has no defence against this.

While I do not agree with the methods used by the Chinese government, the easiest way to avoid this is to not make deals like this, after all it is not as if they are demanding to be handed the airport out of nowhere, it was part of the agreement they reached and since the government of Uganda failed to produce the cash then they have to hand over the collateral they used to guarantee the deal, and it should not surprise anyone as this happens all the time in the forum and all over the world as well.

People only really ignore terms and conditions if they don't expect them to be enforced though so it's quite strange they wouldn't bother?


Well, other countries' banks could always try to compete with Chinese banks on that. I'm surprised North American and European banks haven't yet, they've normally overleveraged themselves on something by this point.

(although vaccine producers have been blamed for doing similar recently).



They've learnt from their own colonisers on that one... Sounds like the agreement the UK had for Hong Kong (1,063.70 sq mi - Wikipedia). That was returned though at the end of its lease, perhaps China plans to extend their lease in places that will agree to it.

That's 42 low to middle income countries that they are targeting. Which does mean that what happened to Uganda is something that can happen to any of them. Considering the situation that China is in its trying to dominate the world and they are actually on the right track. If am correct even the US owes debt to China which does mean that what they are doing right now : printing more money and taking more Loans it could soon mean that the power would shift in a couple of years.

-I do think that Uganda might have to pay a lot to get the airport back if they want but looking at the current situation of covid and the new strain they might be in probelms as well in the future.

What would China do with that airport? They should just be humble and help the country out.

Hihi, so they get almost a crew flying once from that airport?
Guess you missed a million or something from that.

Anyhow in this case, if the number of passengers is indeed below 6k a day they are better of giving it to the Chinese even for free, at this low traffic every airport is losing money and needs government subsidies, so Chinese investors will actually have to bear more costs with this one, slap them with taxes for the land and they will give it back for free.


Hihi, Salvador is no exception:
https://www.scmp.com/news/world/americas/article/3134008/el-salvadors-president-plays-china-ties-after-us-corruption

It is difficult to avoid China's bid in terms of infrastructure development needs. Since it's quite complex when it's needed, China comes as a hero. I remember the country of Zimbabwe which got a loan of $40 million to China which ended up netting its country in return. This is a modern colonial technique deliberately devised by China to limit a country to obedience and give China what it needs to take advantage of. Subsequently, Sri Lanka gave up its ports to cover debts they could not repay to China.

It is strange that only China is considered a bad player when it comes to taking over some public or private companies in foreign countries. No one has forced anyone to take loans that they cannot repay, and if I take a loan from a bank and cannot repay it, the bank will confiscate my property and I will become homeless - a harsh reality.

The largest airport in my country is under long-term concession, as are most highways and all major sources of drinking water - and nothing is owned by China. Maybe someone will say that concession and ownership are not the same, but when someone buys you the right to something in a period of 50 years, for some it is almost a lifetime.

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When you say UN, do you mean the incompetent United Nations whose purpose is only to exist and spend huge amounts of money on their salary and luxurious life? How could these parasites help them financially at all?

When it comes to the IMF, do you think El Salvador should have accepted their help instead of choosing Bitcoin? If those countries had invested wisely in the past, today they would have no problem - but many African countries have deliberately fallen into the trap of borrowing money from China, because most of the money ended up in private pockets anyway - I’m sure politicians in Uganda don’t cry for the fact that China took over their airport because they certainly benefited from it.

Little by little this China is getting out of hand. They will really do their best just to get their grip in every country. This is the very example of their bias offers trying to help but in the end, choking you in your own country. This will not stop here but surely in the future some countries will fall to this trap too.

Again and again, this is about how China manipulates an airport so as not to escape the debt services it offers. To master it openly would be impossible. And what we know is that China seems to be offering help until it ends up being entangled in a debt that they keep adding until they can no longer pay it. With an agreement, the function can be taken over if the debt is not paid within the specified time limit.

Until now, if you write down all sectors of the country economy that are in debt with China, one chapter of the book is not enough to write it down. The strategy of communism which has become a tradition is to subtly control what they want to take.

China is now richer than US. How? All credit goes to their lenient corporate tax policy and these loan traps. Today, every major electronic company or car company manufactures their product in China. So China is now trying to make good relation with Russia with a hope to form an alliance and become the main superpower of the world.

There is literally no end to such loan traps. Especially poor countries need easy money and China is providing them with easy money. Pakistan is one prime example of China's loan trap. Their economy is destroyed so much so that the government had to sell off assets to repay loan amount. Sri Lanka had to loose control of a port for the same reason.

This will only stop if the loan defaulters form an alliance and seek help from UN or IMF to help them recover their assets. But it's highly unlikely to happen!

Big companies come crashing down once they have just added too much to their bank sheets and taking too much risks. I think it's not that bad but with all that's happening in the world with the additional variants like Omicron, it's just makes it more sad for those companies that are in the travel industry. It's going to continue bleeding money and a lot of people would be affected as well.

I don't think it can be stopped, knowing that it has been continuously being done by successful people. It's just a matter of time that other people would try that kind of risk.

There was also the issue of proper scrutiny and due diligence on Chinese loan deals on the part of country leaders before they affix their signatures. The insinuation is that debt deals are signed without carefully looking at the terms and conditions detail by detail, thereby resulting to the loss of sovereign assets.

Personally, however, I consider this as a side issue. If these Chinese loan agreements have questionable and unfair clauses sneaked into them, these Chinese banks are obviously entering into deals without good faith. In other words, all these Chinese loan offers boil down to a single motive, and that is domination.

There's always the question of why you'd sign something you don't intend to uphold though, and signing away your only international airport doesn't sound great (although the pandemic probably made it harder to repay the loan too).

Airports actually aren't that profitible too so I'm surprised they're usable for collateral (I saw a study saying half of the airports in the UK were subsidised by the government - although it was on sustainability).

Another one has fallen.

The Entebbe International Airport is now reportedly directly taken over by China due to loan default. The only International airport of Uganda, which serves at least 1.9 passengers every year, is the latest victim of China's loan trap.

In 2015, the Ugandan government took a $207 million-loan from the Export-Import Bank of China for the international airport's expansion. As expected, the loan agreement signed by both parties included sneaky and questionable clauses. Uganda's president, Yoweri Museveni, attempted to renegotiate the deal with the Chinese government but to no avail. And now that the country has failed to repay this commercial loan, a clause which basically means the airport will have to be surrendered to China is feared to have taken effect.

The Ugandan Entebbe International Airport is just one among many countries' national assets that had to be directly forfeited in favor of China due to loan default.

This post-modern way of conquest by China will have to stop! But how?

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Sources:

1. https://economictimes.indiatimes.com/news/international/business/china-reportedly-takes-over-ugandas-airport-on-account-of-loan-default/articleshow/87957646.cms
2. https://www.ndtv.com/world-news/china-to-seize-entebbe-airport-over-loan-uganda-denies-debt-trap-reports-2628059