Tanzania President cancels $10billion Chinese loan; Refers to the Terms and Conditions As One That C

[striver44]

Apr 20, 2020

Is Magufuli a demigod or the general African leadership has started stepping up to Chinese Killer loans? Let’s digest it. A few years back, African leaders developed a sudden inexplicable craze for Chinese killer loans with terms and conditions that beats logic.

They sign Chinese loan agreements that they know very well they cannot pay back within the agreed time frame but mostly proceed with the loans just for the kickbacks attached and the benefits some individual politicians stand to get from such contracts to the detriment of the development of their respective nations. In most cases, the defaulted loans lead to the seizure of major facilities to make-up for the amount involved.

Following a series of constructive criticisms by reputable organizations and general outcry by concerned African citizens about the dire consequences of these killer loans on the continent, some of the leaders seem to be taking certain commendable actions to save their dying reputations.

Tanzania President cancels $10billion Chinese loan; Refers to the Terms and Conditions As One That Can Only be Accepted by Drunkard Person.CLICK TO TWEET
Prior to the enlightenment and outrage by the African citizenry, the least was heard of African leaders or governments confronting China to loosen up their terms or face suspension of contracts but in recent times, they are building some courage to do the needful.

The Tanzanian head of state, John Magufuli canceled Chinese loan of ten billion US dollar (US$10billion) agreement signed by his predecessor, Jakaya Kikwete with Chinese investors to construct a port at Mbegani creek in Bagamoyo, just north of Da es Salaam.

YOU MISSED THIS: Breaking News: Chinese Lied About Coronavirus! 60,000 people dead, 1.5 Quarantine.
The Chinese investors initially agreed with the erstwhile Tanzanian administration to build the said port on condition that, they will be granted a 30years guarantee, 99years uninterrupted lease with an attached outrageous demand that, the Tanzanian government will have absolutely no power to raise concerns on whoever invests in the port during the period stated.

This sounds very ridiculous, but it was actually signed by a certain government which raises the question of whether our lead negotiators read and understand agreements before appending their signatures. In the words of Magufuli, the above terms and conditions could only be accepted by mad people. in effect, He initiated a renegotiation with the investors to bring down the lease period to 33 instead of the initial 99 years negotiated.

The government equally stated clearly that there will be no tax or utility exemption for the investors as has mostly been the case in the parasitic China-Africa trade relations. Additionally, the investors will need the approval of the government in order to operate any new business at the port. The government issued a time frame which the investors failed to meet, resulting in the suspension of the agreement.

Aside Tanzania, it could be remembered that, the Julius Maada Bio lead administration in Sierra Leon equally suspended a $400 million airport construction agreement in 2018. He was quoted to have said that: “it is uneconomical to proceed with the construction of the new airport when the existing one is grossly underutilized”.

Additionally, there have been several other resistances to Chinese backed contracts in Africa. The cancellation of a USD2 billion coal plant contract in Kenya, among few others, are typical examples of the growing awareness.

YOU MISSED THIS: Leading By Example: Governor Mike Mbuvi Sonko Lead Fumigation Of All Slums In Madiwa Eastleigh.
Does this imply that there are no countries in Africa that are still taking these killer Chinese loans? No! some countries still sign such agreements, mostly at the blind side of the public and the consequences will soon be seen.

The acknowledgment of the above bold steps taken is mainly to encourage the African leadership to move away from the killer Chinese loan mindset which is a looming neocolonial trap and focus more on transformational ideas to make good use of our resources. Even if they will consider signing such, they should come with reasonable and mutually beneficial terms.

https://www.nairobiminibloggers.com...that-can-only-be-accepted-by-drunkard-person/

 

[Viva_Viet]

Apr 20, 2020

Is Magufuli a demigod or the general African leadership has started stepping up to Chinese Killer loans? Let’s digest it. A few years back, African leaders developed a sudden inexplicable craze for Chinese killer loans with terms and conditions that beats logic.

They sign Chinese loan agreements that they know very well they cannot pay back within the agreed time frame but mostly proceed with the loans just for the kickbacks attached and the benefits some individual politicians stand to get from such contracts to the detriment of the development of their respective nations. In most cases, the defaulted loans lead to the seizure of major facilities to make-up for the amount involved.

Following a series of constructive criticisms by reputable organizations and general outcry by concerned African citizens about the dire consequences of these killer loans on the continent, some of the leaders seem to be taking certain commendable actions to save their dying reputations.

Tanzania President cancels $10billion Chinese loan; Refers to the Terms and Conditions As One That Can Only be Accepted by Drunkard Person.CLICK TO TWEET
Prior to the enlightenment and outrage by the African citizenry, the least was heard of African leaders or governments confronting China to loosen up their terms or face suspension of contracts but in recent times, they are building some courage to do the needful.

The Tanzanian head of state, John Magufuli canceled Chinese loan of ten billion US dollar (US$10billion) agreement signed by his predecessor, Jakaya Kikwete with Chinese investors to construct a port at Mbegani creek in Bagamoyo, just north of Da es Salaam.

YOU MISSED THIS: Breaking News: Chinese Lied About Coronavirus! 60,000 people dead, 1.5 Quarantine.
The Chinese investors initially agreed with the erstwhile Tanzanian administration to build the said port on condition that, they will be granted a 30years guarantee, 99years uninterrupted lease with an attached outrageous demand that, the Tanzanian government will have absolutely no power to raise concerns on whoever invests in the port during the period stated.

This sounds very ridiculous, but it was actually signed by a certain government which raises the question of whether our lead negotiators read and understand agreements before appending their signatures. In the words of Magufuli, the above terms and conditions could only be accepted by mad people. in effect, He initiated a renegotiation with the investors to bring down the lease period to 33 instead of the initial 99 years negotiated.

The government equally stated clearly that there will be no tax or utility exemption for the investors as has mostly been the case in the parasitic China-Africa trade relations. Additionally, the investors will need the approval of the government in order to operate any new business at the port. The government issued a time frame which the investors failed to meet, resulting in the suspension of the agreement.

Aside Tanzania, it could be remembered that, the Julius Maada Bio lead administration in Sierra Leon equally suspended a $400 million airport construction agreement in 2018. He was quoted to have said that: “it is uneconomical to proceed with the construction of the new airport when the existing one is grossly underutilized”.

Additionally, there have been several other resistances to Chinese backed contracts in Africa. The cancellation of a USD2 billion coal plant contract in Kenya, among few others, are typical examples of the growing awareness.

YOU MISSED THIS: Leading By Example: Governor Mike Mbuvi Sonko Lead Fumigation Of All Slums In Madiwa Eastleigh.
Does this imply that there are no countries in Africa that are still taking these killer Chinese loans? No! some countries still sign such agreements, mostly at the blind side of the public and the consequences will soon be seen.

The acknowledgment of the above bold steps taken is mainly to encourage the African leadership to move away from the killer Chinese loan mindset which is a looming neocolonial trap and focus more on transformational ideas to make good use of our resources. Even if they will consider signing such, they should come with reasonable and mutually beneficial terms.

https://www.nairobiminibloggers.com...that-can-only-be-accepted-by-drunkard-person/

Right choice for them. U will never can pay back the loan and u will lose ur lands, ur port to CN.

Just try to grow enough of rice during the pademic, then u will be safe.

 

[Tom99]

The negotiation of the project was suspended June 25, 2019 already and no construction have been done anyway. It was a gigantic project and if both side can't come to an agreement then the project should cease.

https://www.enr.com/articles/47134-tanzania-suspends-bagamoyo-port-project

 

[cochine]

Cambodia, Sri Lanka and the China debt trap
18 March 2017

Authors: Veasna Var, UNSW Canberra and Sovinda Po, ECNU

The influx of Chinese economic assistance into Sri Lanka and Cambodia has raised questions regarding the intentions behind these massive loans. While China may still be considered a developing economy, its current strategy of providing soft power loans and aid to its regional neighbours is reminiscent of the tributary system that the country employed back in its empire days.

Cambodia is one of China’s closest international partners and diplomatic allies, as well as being well and truly under China’s economic and political influence. Cambodian Prime Minister Hun Sen recently described China as Cambodia’s ‘most trustworthy friend’. Similarly, Chinese President Xi Jinping described Cambodia as ‘like a brother’ when Cambodian King Norodom Sihamoni visited Beijing in June 2016. China is now Cambodia’s largest military benefactor and provider of development aid and foreign investment, having given about US$3 billion in concessional loans and grants to Cambodia since 1992.

A 2016 International Monetary Fund (IMF) report showed that Cambodia’s external multilateral public debt is now at US$1.6 billion, while its bilateral public debt with China is US$3.9 billion — 80 per cent of this is owned by China.

Looking further afield, Sri Lanka’s growing economic engagement with China has also generated concern among scholars and policymakers. One side of the argument posits that China has made a positive contribution to the economic growth of Sri Lanka. China has provided Sri Lanka with over US$5 billion between 1971 and 2012. Most of this has gone into infrastructure development, with China investing US$1 billion into a deep-water port at Hambantota and billions into the Mattala Airport, a new railway and the Colombo Port City Project.

As a small country emerging from civil war, infrastructure is crucial in facilitating Sri Lanka’s trade and foreign investment sectors. The World Bank forecasts that Sri Lanka’s GDP growth is likely to grow from 3.9 per cent in 2016 to around 5 per cent in 2017.

Yet opponents see flaws in the China–Sri Lanka bilateral relationship. First, Sri Lanka has borrowed billions of dollars from China in order to build domestic infrastructure. Sri Lanka’s estimated national debt is US$64.9 billion, of which US$8 billion is owed to China. This can be attributed to the high interest rate on Chinese loans. For the Hambantota Port project, Sri Lanka borrowed US$301 million from China with an interest rate of 6.3 per cent, while the interest rates on soft loans from the World Bank and the Asian Development Bank (ADB) are only 0.25–3 per cent. Sri Lanka is very deep in a debt crisis or ‘debt trap’ as some scholars describe it.

Second, Sri Lanka is currently unable to pay off its debt to China because of its slow economic growth. To resolve its debt crisis, the Sri Lankan government has agreed to convert its debt into equity. But the recent Sri Lankan decision allowing Chinese firms 80 per cent of the total share and a 99 year lease of Hambantota port caused public outrage and violent protests in Sri Lanka. In addition, Chinese firms have been given operating and managing control of Mattala Airport, built by Chinese loans of US$300–400 million, because the Sri Lankan government is unable to bear the annual expenses of US$100–200 million.

According to Brookings Institute visiting fellow Kadira Pethiyagoda, having access to the Hambantota port and Mattala airport provides Beijing with a strategic military position in the event of an Indian Ocean conflict and is also key for its ‘Belt and Road’ initiative. The growing Chinese influence may also compel Sri Lanka to support China’s position on the South China Sea dispute and ‘One China’ policy.

While Cambodia and Sri Lanka differ in terms of their geographic location, demography and pattern of strategic relations with China, there are some crucial lessons that Cambodia and other small countries can learn to avoid ending up in Sri Lanka’s position.

Cambodia needs to diversify its borrowing sources and critically consider taking loans from multinational donor agencies like the IMF, the World Bank, the ADB as well as other major countries like the United States and Japan. While the approval process would be slower, the wait is beneficial because these loans are attached to strict conditions of accountability, transparency and rule of law.

Cambodia must be aware that China’s influence in the country will grow as the loans increase. This is already evident, with Cambodia’s recent decision to unilaterally delay the Angkor Sentinel with the United States for two years and to ban the Taiwanese flag from being raised in Cambodia. Cambodia’s foreign policy seems to largely serve China’s political and diplomatic interests in the region while Cambodia’s own international reputation and soft power are eroding.

When borrowing from China, Cambodia needs to initiate the legal contract and detail the terms and conditions of the loans and aid in accordance with international standards. Cambodia will also need to diversify its foreign policy to include other countries and regional initiatives like ASEAN and the Greater Mekong Sub-Region Economic Cooperation.

But none of this will be possible until Cambodia resolves its own domestic priorities. This includes the elimination of corruption, cronyism, forced evictions, land evictions and the protection of human rights and fair elections. This will bolster support from the international community and counterbalance China’s dominant presence in the country.

Veasna Var is a PhD candidate at the University of New South Wales (UNSW), Canberra and Sovinda Po is a masters student at East China Normal University (ECNU), Shanghai.

 

[Viet]

Apr 20, 2020

Is Magufuli a demigod or the general African leadership has started stepping up to Chinese Killer loans? Let’s digest it. A few years back, African leaders developed a sudden inexplicable craze for Chinese killer loans with terms and conditions that beats logic.

They sign Chinese loan agreements that they know very well they cannot pay back within the agreed time frame but mostly proceed with the loans just for the kickbacks attached and the benefits some individual politicians stand to get from such contracts to the detriment of the development of their respective nations. In most cases, the defaulted loans lead to the seizure of major facilities to make-up for the amount involved.

Following a series of constructive criticisms by reputable organizations and general outcry by concerned African citizens about the dire consequences of these killer loans on the continent, some of the leaders seem to be taking certain commendable actions to save their dying reputations.

Tanzania President cancels $10billion Chinese loan; Refers to the Terms and Conditions As One That Can Only be Accepted by Drunkard Person.CLICK TO TWEET
Prior to the enlightenment and outrage by the African citizenry, the least was heard of African leaders or governments confronting China to loosen up their terms or face suspension of contracts but in recent times, they are building some courage to do the needful.

The Tanzanian head of state, John Magufuli canceled Chinese loan of ten billion US dollar (US$10billion) agreement signed by his predecessor, Jakaya Kikwete with Chinese investors to construct a port at Mbegani creek in Bagamoyo, just north of Da es Salaam.

YOU MISSED THIS: Breaking News: Chinese Lied About Coronavirus! 60,000 people dead, 1.5 Quarantine.
The Chinese investors initially agreed with the erstwhile Tanzanian administration to build the said port on condition that, they will be granted a 30years guarantee, 99years uninterrupted lease with an attached outrageous demand that, the Tanzanian government will have absolutely no power to raise concerns on whoever invests in the port during the period stated.

This sounds very ridiculous, but it was actually signed by a certain government which raises the question of whether our lead negotiators read and understand agreements before appending their signatures. In the words of Magufuli, the above terms and conditions could only be accepted by mad people. in effect, He initiated a renegotiation with the investors to bring down the lease period to 33 instead of the initial 99 years negotiated.

The government equally stated clearly that there will be no tax or utility exemption for the investors as has mostly been the case in the parasitic China-Africa trade relations. Additionally, the investors will need the approval of the government in order to operate any new business at the port. The government issued a time frame which the investors failed to meet, resulting in the suspension of the agreement.

Aside Tanzania, it could be remembered that, the Julius Maada Bio lead administration in Sierra Leon equally suspended a $400 million airport construction agreement in 2018. He was quoted to have said that: “it is uneconomical to proceed with the construction of the new airport when the existing one is grossly underutilized”.

Additionally, there have been several other resistances to Chinese backed contracts in Africa. The cancellation of a USD2 billion coal plant contract in Kenya, among few others, are typical examples of the growing awareness.

YOU MISSED THIS: Leading By Example: Governor Mike Mbuvi Sonko Lead Fumigation Of All Slums In Madiwa Eastleigh.
Does this imply that there are no countries in Africa that are still taking these killer Chinese loans? No! some countries still sign such agreements, mostly at the blind side of the public and the consequences will soon be seen.

The acknowledgment of the above bold steps taken is mainly to encourage the African leadership to move away from the killer Chinese loan mindset which is a looming neocolonial trap and focus more on transformational ideas to make good use of our resources. Even if they will consider signing such, they should come with reasonable and mutually beneficial terms.

https://www.nairobiminibloggers.com...that-can-only-be-accepted-by-drunkard-person/

Africa will default on chinese loans. It’s impossible for Africa economies to pay back the debts. Most chinese backed infra don’t generate money. They are burdens in time of crisis like this today.

Vietnam major concerns are chinese loans to Cambodia and Laos. What territory will China take from those countries if they default on chinese loans? If happened it will increase the vulnerability for Vietnam on the western flank.

 

[IblinI]

China obsession daily quest completed.

 

[Song Hong]

No big deal when everyone do serial argentina default.

They will always come back begging for yet another deal.

 

[Darth Vader]

No free lunch today

 

[That Guy]

No big deal when everyone do serial argentina default.

They will always come back begging for yet another deal.

Reading about the terms and conditions, it really was a bad deal for them. There was no way they would have been able to pay off those loans.

It's not just China though, I've always been critical of any loan and aid programs from major powers (US, EU, RUSSIA...ETC) , which put nations into debt, and force them to be reliant on foreign powers for stability and sustainability.

It should be trade, not aid.

 

[Song Hong]

The money dont go to welfare, TBTF banks or property. It goes to infrastructure.

You need to consider increase of wealth of nations upon infrastructure investment, in addition, opening up mineral and other resources.

The aggregate income will rise and eventually it will pay the debt off.

Reading about the terms and conditions, it really was a bad deal for them. There was no way they would have been able to pay off those loans.

It's not just China though, I've always been critical of any loan and aid programs from major powers (US, EU, RUSSIA...ETC) , which put nations into debt, and force them to be reliant on foreign powers for stability and sustainability.

It should be trade, not aid.

 

[cochine]

China’s “debt trap” is even worse than we thought
June 29, 2018

By Tim Fernholz

Senior reporter

An egotistical president, an influx of foreign cash, and a massive pile of debt led to Sri Lanka handing over an entire port to China in December 2017, on a century-long lease.

That handover gave China a strategic foothold just 100 miles from its rival India, akin to how the Soviet Union’s foothold in Cuba raised US blood pressure during the Cold War. Chinese submarines have already appeared there.

But now new details have emerged, including the news that despite ceding the port, Sri Lanka is more indebted to Beijing than ever thanks to the high interest rates on its existing loans. This year, the country owes nearly $13 billion, out of a forecast revenue of less than $14 billion.

Such a vulnerability to global influence is one reason China spent millions in 2015 trying to re-elect the Sri Lankan president, Mahinda Rajapaksa, who signed off on many of those debts, lost his office, and is now plotting a return to power.

A New York Times investigation elaborates on the story of how the port at Hambantota came to be, despite the fact that there was little apparent need for a new working harbor on the small island nation. Instead, the site was chosen because it was the political base of Rajapaksa, who sought a symbolic project to celebrate his greatness.

Rajapaksa’s regime had grown close to China as Sri Lanka faced international isolation at the tail end of a brutal civil war between the government and Tamil insurgents. China continued to provide funds and support for Rajapaksa, and in turn he supported Chinese foreign-policy objectives in the region.

So when he sought to build a port, China was generous, with hundreds of millions of dollars in loans—as long as Chinese companies could build the port, and the comings and goings there could be shared with Chinese intelligence. As the project stretched on, growing increasingly over-budget with little apparent revenue, new loans, with ever-higher interest rates, were needed. The port opened early, in 2010, but there was still a large rock blocking ships from entering that needed to be destroyed—at a cost of $40 million.

Despite China’s spending on the 2015 election, Rajapaksa was pushed out over corruption concerns. But the new government had little choice but to accede to China’s demand to hand over the port in 2018 as the country’s debts worsened. In 2017, it borrowed $1.5 billion from the IMF, but this wasn’t enough—in May 2018, Sri Lanka took a new loan worth $1 billion from the China Development Bank.

Sri Lanka isn’t the only country now fretting about debt to China. The Center for Global Development, a nonprofit research firm, analyzed debt to China that will be incurred while participating in the planned Belt and Road infrastructure investment scheme. It concluded that eight nations could find themselves vulnerable to above-average debt: Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan.

Back in Sri Lanka, the government says that foreign militaries are still forbidden at the Hambantota port. But China’s history of broken promises when it comes to military installations abroad, combined with Sri Lanka’s still-rising debt load, means that any restriction could be temporary.

A new party led by Rajapaksa won local elections in 2018, and while he is prohibited from seeking the presidency again, one of his brothers is seen as a potential candidate for national elections in 2020.

 

[That Guy]

The money dont go to welfare, TBTF banks or property. It goes to infrastructure.

You need to consider increase of wealth of nations upon infrastructure investment, in addition, opening up mineral and other resources.

The aggregate income will rise and eventually it will pay the debt off.

Feel free to correct me, if I'm wrong. I'm more than willing to admit if I am.


Having said that...that's an assumption on your part. Income will only rise, if these projects actually generate revenue. Even then, it's a matter of how much revenue they generate, verses how much money is owed.

The truth is, the Indians do have a point when they talk about Hambantota. The revenue that was promised to be generated, never materialized. This ended with with the port going straight to China's hand for the next 99 years. The money would have been better served being invested in education, and healthcare projects.

 

[ChennaiDude]

Africa will default on chinese loans. It’s impossible for Africa economies to pay back the debts. Most chinese backed infra don’t generate money. They are burdens in time of crisis like this today.

Vietnam major concerns are chinese loans to Cambodia and Laos. What territory will China take from those countries if they default on chinese loans? If happened it will increase the vulnerability for Vietnam on the western flank.

Reminds me of how the British East India company operated- Seems like a copycat Model- Read through the link-A lot of similarities.

https://www.historyextra.com/period...trading-corporation-became-an-imperial-ruler/

 

[Tom99]

Reading about the terms and conditions, it really was a bad deal for them. There was no way they would have been able to pay off those loans.

Can you quote the method and scheduling repayment for the loan?

 

[Song Hong]

No one other than the top leaders know the exact term.

Healthcare are consumption and reduce wealth. Infrastructure is production bias. Chinese Infrastructure plans ahead of time. White man always ridicule it as white elephant. And white man are always found to be wrong later.

Sovereign government can do what they want to the point of confiscation and default.

Last Sri Lanka government confiscated Hambantota. Of course the Chinese armada of merchant fleet is going to avoid this port like plague.

Feel free to correct me, if I'm wrong. I'm more than willing to admit if I am.


Having said that...that's an assumption on your part. Income will only rise, if these projects actually generate revenue. Even then, it's a matter of how much revenue they generate, verses how much money is owed.

The truth is, the Indians do have a point when they talk about Hambantota. The revenue that was promised to be generated, never materialized. This ended with with the port going straight to China's hand for the next 99 years. The money would have been better served being invested in education, and healthcare projects.