• Monday, November 18, 2019

China To Take Over Kenya & Uganda’s Main Assets Over Unpaid Rising Huge Debt

Discussion in 'Middle East & Africa' started by Zapper, Nov 8, 2019.

  1. Zapper

    Zapper FULL MEMBER

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    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

    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.

    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.”

    • Africa Stand
    https://www.zimeye.net/2019/03/16/c...das-main-assets-over-unpaid-rising-huge-debt/
     
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  2. Zapper

    Zapper FULL MEMBER

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    China to take over Kenya’s main port over unpaid huge Chinese Loan

    Kenyan government risks losing the lucrative Mombasa port to China should the country fail to repay huge loans advanced by Chinese lenders.

    In November, African Stand reported on how Kenya is at high risk of Losing strategic assets over huge Chinese debt and just after a few month the Chinese are about to take action.

    The loans have been granted for the development of the Standard Gauge Railway (SGR).

    Also at stake is the Inland Container Depot in Nairobi, which receives and dispatches freight hauled on the new cargo trains from the seaport.

    Implications of a takeover would be grave, including the thousands of port workers who would be forced to work under the Chinese lenders.

    Management changes would immediately follow the port seizure since the Chinese would naturally want to secure their interests.

    Further, revenues from the port would be directly sent to China for the servicing of an estimated Sh500 billion lent for the construction of the two sections of the SGR.

    Related: Just Like Zambia, Sri Lanka also handed over its port to China to pay off debt

    Precedent
    In December 2017, the Sri Lankan government lost 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.

    The transfer, according to the New York Times, gave China control of the territory just a few hundred miles off the shores of rival India.

    It is a strategic foothold along a critical commercial and military waterway.

    “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 of December 12, 2017.

    In September 2018, Zambia lost Kenneth Kaunda International Airport to China over debt repayment.

    Related: China to write off $733K Botswana loan after taking over Sri-Lanka port

    SGR Losses
    In the likely scenario that China takes over the port, Kenya would be joining Sri Lanka -another debt-distressed nation- in losing a strategic asset.

    It is possible because the SGR –operated by the Chinese, is a hugely loss-making venture, meaning it cannot generate enough money to repay loans.

    SGR reported a near Sh10 billion loss in its first year of operations.

    The Auditor-General has warned that the eventuality is likely because of a lopsided loan agreement that greatly favors the China Exim Bank, who advanced Kenya the loan.

    Specifically, Kenya got the short end of the stick in the agreement where any disputes arising from the debt servicing would be arbitrated in China.

    An audit completed last month indicates that Kenya Ports Authority’s (KPA) assets, which include the Mombasa port, could be taken over if the SGR does not generate enough cash to pay off the debts.

    “The China Exim Bank would become a principle in (over) KPA if Kenya Railways Corporation (KRC) defaults in its obligations and China Exim Bank exercise power over the escrow account security,” the audit reads in part.

    [​IMG]

    Related: China to take over Zambia’s international Airport for debt repayment

    Escrow account
    An escrow account is a contractual arrangement in which a third party receives and disburses money for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties.

    According to the loan agreement, funds generated from the SGR were to be deposited in an escrow account – controlled by an unknown third party on behalf of KRC and China Exim Bank.

    At the current estimates, KPA generates Sh50 billion a month or Sh600 billion a year in revenues.
    [​IMG]
    F.T Kimani, the auditor, cited in his report that KPA’s exposure is linked to a requirement that it feeds sufficient cargo to the Chinese-built railway project.

    Failure to provide the requisite cargo would mean Kenya has gone against a critical clause in the loan agreement of guaranteeing specified “minimum volumes required for consignment”.

    It is also indiscernible how KPA signed the loan agreement as a borrower, in one of the toxic clauses subsequently exposing its assets to the Chinese clamp.

    “…any proceeding(s) against its assets (KPA) by the lender would not be protected by sovereign immunity since the Government waived the immunity on the Kenya Ports Assets by signing the agreement,” the auditor wrote.

    Repayments for the loans are slated to start mid next year on the expiry of a five-year grace period.

    https://www.africanstand.com/busine...nyas-main-port-over-unpaid-huge-chinese-loan/
     
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  3. Nityam

    Nityam BANNED

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    LOL.

    Good news for pakistan. All they have to do is hand over their land to chinese to repay their loans....... Oh wait.

    And people here are wondering why Indian did not participate in OBOR and has now walked away from RCEP. :lol:
     
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  4. POTTER

    POTTER FULL MEMBER

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    All I can see is the *** burning of indians and it makes me happy.:drag:
     
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  5. Sineva

    Sineva FULL MEMBER

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    Ahhh......,so this is the Vassalage "with chinese characteristics for a new era" that we`ve been hearing so much about recently.[LOL!!]
    :devil::china::devil:
     
  6. Kaleem.61

    Kaleem.61 FULL MEMBER

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    One thing you need to understand Pakistan is neither Srilanka nor Kenya (or whatever).

    We shall pay the loan in 40 years or China will be taking bigger part of the profit until loan payment. So all you should shut your mouths and watch anti Chinese mahaan tv channels.
     
    Last edited: Nov 8, 2019
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  7. Nityam

    Nityam BANNED

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    First mughals, then british, then americans and now chinese. I think we all know and understand pakistan.

    I think the only one who does not understand pakistan are the people of pakistan. Outsiders tend to understand and manage pakistan quite well.
     
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  8. Jaanbaz

    Jaanbaz ELITE MEMBER

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    Debt trap policies of China are real, some of us sane minded Pakistanis have been warning of this before but we get labelled as traitors for questioning the grand wisdom of Pakistani politicians and the Establishment.
     
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  9. Sine Nomine

    Sine Nomine ELITE MEMBER

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    Mughals and Brits pretty much spanked whole of India and Brits who were just parasites started off from Calcutta.Areas which makes up Pakistan today was last to fall and they fail to control almost half of it till 1947,last pocket of resistance in controlled area died in 1932:azn:
     
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  10. Nityam

    Nityam BANNED

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    Difference is we learnt from our mistakes.
     
  11. Sine Nomine

    Sine Nomine ELITE MEMBER

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    Yeah and pigs have started flying.
     
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  12. kingQamaR

    kingQamaR FULL MEMBER

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    You had become a very good race people obedient coolies for Britain Raj and Queen Victoria for hundreds of years.

    You Shouldn’t lie and include us in your shameless surrender, most of Pakistan vast areas of were ferociously independent off limits to any British there.
     
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  13. Nityam

    Nityam BANNED

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    LOL.

     
  14. kingQamaR

    kingQamaR FULL MEMBER

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    Hahaha....Abdul was obedient indian lol

    Not from Indus border what Pakistan is hahaha
     
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  15. Nityam

    Nityam BANNED

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    Back then Pakistan was India too :lol:
     
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