African nations being forced to hand over national assets to China
Dec 13, 2021
Kampala [Uganda], December 13 : Some African nations are being forced to hand over national assets to China due to certain agreements they signed with Beijing years back and ignored crucial clauses in an attempt to show goodwill gesture to the Asian giant.
Uganda has emerged as one of the most recent African examples of Beijing's debt-trap policy. The nation is preparing to hand over its only international airport to the Chinese companies because it was unable to repay the USD 207 million loan to the communist regime.
The two countries had signed the agreement in November 2015.
Uganda at the time of the deal had removed the international immunity clause from the agreement showing a gesture of goodwill. But the removal of the clause has now become Uganda's major mistake, resulting in the handover of its only international airport in near future to China.
But Uganda is not the only African nation that is facing this issue. There are others too.
Chinese companies and banks have now started to reduce their assistance in Africa. Beijing at the recently held Forum on China Africa Cooperation (FOCAC) stated that it was significantly reducing its assistance to Africa, from USD 60 billion to USD 40 billion. China-based banks that were financing in Africa under the BRI have reduced assistance drastically from USD 11 billion in 2017 to USD 3.3 billion in 2020.
Ethiopia also has similar stories as Uganda. In 2019, the country had signed worth USD 2.6 billion projects with Chinese companies. The number of projects were 346. With the projects, Ethiopia hoped the employment generation for the local population.
But the expectation did not come into reality as Chinese labourers in Ethiopia in that year increased from 8,000 to 12,000. The surge in Chinese resulted in a major blow employment generation for the local population.
The initial promises which Chinese companies had made to the African countries most of them have been cut down in scope as companies revealed their real nature to the host countries.
In Africa, 50 out of 54 countries have taken loans from Chinese entities worth USD 153.4 billion from 2009 to 2019. Now due to the COVID crisis, these countries are facing issues to repay the loans. In the near future, the possibilities of more defaults, repossessions by Chinese companies still persist.
