On Tuesday, 17th November 2015, the Ugandan government signed an agreement with the Chinese Export and Import Bank(Exim Bank) to borrow $207 million. The loan had a maturity period of 20 years. Now the country is about to lose one of its strategic assets, it’s only International airport, to the Chinese government. Was this a debt trap? Certainly one would conclude so.
For a country like Uganda whose GDP as of 2015 was just above $32 million, China definitely would have predicted that the country would not be able to attest for such a sum of cash over time. But is this the first of its kind? Certainly not. Countries like Maldives, Malaysia and Sri Lanka have also fallen to this debt trap, which China has been hauling for long. But what message does this send to the rest of Africa? At the verge of the 21st Century where third world countries are eager to develop their countries as their western counterparts, they need so much funding to achieve this, but yet don’t have the capital, so they go borrowing at which China is ever ready to lend a helping hand;
But what does it seek by passing out multiple dishes of loans? The Belt and Road Initiative was developed to deliberately foster this aid, the purpose was clear, trap weaker nations into a debt trap. Pakistan is also getting at the verge of this. The major fact about this initiative and the economy of a nation from a viewpoint is not clear.
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The Ugandan minister of health apologized for misuse of funds at an occasion, several others under probe, this is the result of ‘unrealized funds’. Are these funds actualized to the purpose they were meant for? Should a government run its economy based on international funding and loans?
Definitely this is definitely not a good idea. African nations need to embrace diversification and openness to several areas of science and technology and learn from how the Saudis’ rose from a desert land into a flourishing country. With the show that the Chinese government is not willing to renegotiate the terms of the 2015 agreement, this is a clear sign that the Belt and Road Initiative was not drafted to help nations but to trap them in becoming captive under Chinese policies.