Jakarta, CNN Indonesia —
Uganda reportedly failed to pay debt ke China. Citing Reuters, Tuesday (11/30), the defaulted debt was worth US$200 million or equivalent to Rp. 2.8 trillion (exchange rate of Rp. 14,335 per dollar) to China.
Due to default Uganda may lose one of the international airports because it is used to pay off debts. Uganda itself has been in debt for a dozen years to China.
The debt is used to build a number of infrastructures including roads and power plants. Uganda’s default on China’s debt has also sparked criticism.
A number of western countries say China is deliberately trapping poor countries with debt so that they are unable to pay.
So, which poor countries have fallen into China’s ‘debt trap’?
1. Zimbabwe
Zimbabwe is rumored to have debts worth US $ 4 million or equivalent to Rp. 57.3 billion. The debt was used to fight insurgency in neighboring Uganda and Rwanda.
Zimbabwean President Laurent Kabali used the debt funds to send troops to buy armed equipment to suppress the rebels.
But unfortunately, due to the debt, Zimbabwe had to follow China’s agreement to accept the yuan as the currency in Zimbabwe in January 2016. This was a consequence of Zimbabwe’s default on its debt to China.
It is known, Zimbabwe has 9 currencies as legal trading instruments namely the US dollar, Australian dollar, South African rand, also Botswana, European euro, British pound, Japanese yen, Chinese yuan and Indian rupee.
2. Sri Lanka
Quotes CNN.com, Sri Lanka had to lose two of its proud infrastructure namely airports and ports because they had to hand them over to China.
This unfortunate fate occurred in 2017. Sri Lanka had to release its port to China because it was unable to pay its debts to China. As a reminder, China indeed poured a debt of US $ 1.5 billion to Sri Lanka in 2010 and then to build the Hambantota Port.
In the same year, China poured funds amounting to US $ 200 million for the construction of the second international airport in the country. After defaulting, Sri Lanka finally had to hand over the port with a contract to serve the Chinese company for 99 years.
In addition to the debt trap, China also still has receivables to Sri Lanka amounting to US$272 million. Receivables were used for the construction of the railway line in 2013. China also has receivables of more than US$1 billion for the construction of the Colombo Port City project.
3. Nigeria
Nigeria, a country on the Gulf of Guinea, has a number of debts to China. Debt is raised for infrastructure development. The debt is reportedly shackled Nigeria.
The reason is, the Chinese government requires that infrastructure development in the country must use raw materials and manual labor from China.
In fact, Nigeria is the largest oil producer on the African continent. The fossil energy even provides 60 percent of income to the country and supports 90 percent of foreign currency exchange in the country.
“We have huge reserves of gas and oil in Nigeria,” said Adewale Ajayi, KPMG Partner Nigeria in Lagos Nigeria.
4. Uganda
China has reportedly acquired ownership of Entebbe International Airport in Uganda. Uganda’s debt agreement itself was never made public, so it’s hard to know.
However, legal official Joel Ssenyonyi on Uganda’s parliamentary inquiry committee said the debt entitles Exim bank, the lender, to manage the airport’s annual budget.
However, the Chinese Embassy in Uganda denied the accusations were malicious acts aimed at damaging good relations between the two countries.
The embassy also admitted that it had never taken any projects in Africa as compensation for defaulting on debt.
Uganda itself is rumored to be renegotiating its loan through Ugandan Finance Minister Matia Kasaija.
(fry / agt)
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