At a recent investigation by the Parliament Committee on Commissions Statutory Authority and State Enterprises- COSASE, it emerged that the agreement compelled Uganda to establish an escrow account to hold all revenues. The agreement also gave China powers to approve CAA budgets before spending the money and China to inspect CAA and Uganda’s books of account something interpreted as eroding Uganda’s sovereignty.
The Alliance for National Transformation -ANT party has asked the government to table
before Parliament, a repayment plan for the Entebbe Airport Loan.
In 2015, the government represented by the finance
ministry and the Civil Aviation Authority-CAA signed an agreement with China
Exim Bank to borrow U$200 million at two percent upon disbursement with a
maturity period of 20 years including a seven-year grace period.
The loan was to be used to build a new cargo terminal; resurface the main runway with a full-length parallel taxing and new lighting and reconstruct the
But a recent investigation by the
Parliament Committee on Commissions Statutory Authority and State Enterprises-
COSASE, unveiled clauses interpreted as eroding Uganda’s sovereignty.
The agreement compelled Uganda to establish an escrow
account to hold all revenues, gave China powers to approve
CAA budgets before spending the money, and to inspect CAA and Uganda’s
books of accounts.
It was also found that Uganda wanted to renegotiate the loan but China declined, something that raised uproar with some people saying that China would take over the airport.
The ANT Acting National Coordinator Alice Alaso told the press today at the party
headquarters at Buganda road in Kampala that Uganda cannot afford to lose its only
International airport and a national asset with deep historical importance.
Also says the government needs to devise all means, looking at all sectors to see
how they shall pay the loan as soon as it is due for repayment.
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Following the revelation of the committee, voices from parliament and the public demanded
that government re-negotiate the loan. However, yesterday, the Attorney General
Kiryowa Kiwanuka said that there is no need to renegotiate the loan assuring
Ugandans that the loan shall be financed.
But Alaso insists that Parliament should use its mandate to demand for a
comprehensive loan review to address gaps identified by COSASE. She also wants government
officials involved in the loan negotiations to be investigated and those
found to have acted in a manner that disadvantaged the country made to resign.
She further asked government to tame its appetite for loans and raise revenue
from within by stopping wastage expenditure and corruption tendencies.
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The President of ANT Gen. Mugisha Muntu says it is the leadership problem faced
by Uganda that has led to such acts of mischief. To Muntu, all foreign governments
will want to reap you off and it is the duty of the leaders to cushion
the country against such. But for Uganda, it's the leaders selling out the
country, he says.
Gen Muntu says it's self-serving greedy people who hold public offices and
conduct business in a manner detrimental to the country.
He says without
Institutions, property systems and Civil servants of integrity Uganda shall continue
to be taken for granted.
But Muntu says the problem comes right from the top seat, the presidency, and that’s
the reason President Yoweri Museveni is silent about the matter.
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However, the Minister for Works and Transport Gen.
Katumba Wamala says China cannot take over Entebbe airport because they don’t
possess the title of the land where the airport is situated.
He says the
clauses that required Uganda to open an escrow account were intended to protect
the loan repayment such that in-case Uganda fails to get money from other
accounts to repay the loan, it can use the escrow account.
Katumba described as
baseless claims statements that China shall take over the Airport, after
all, that the grace period and payment period are still running.