Uganda launched a campaign early this week to attract thousands of Chinese tourists amid concerns Beijing will seize some of the African country’s sovereign assets over its rising public debt fuelled by the Asian giant’s Belt and Road Initiative (BRI).
The African nation’s worries confirm U.S. assertions that China is using “debt traps” through BRI, also known as the One Belt, One Road (OBOR) project, to undermine the sovereignty of borrowing countries in Africa, Europe, and Latin America.
A report released this month by Uganda’s auditor-general warns that public debt from 2017 to 2018 had increased from $9.1 billion to $11.1 billion.
Nevertheless, Matia Kasaija, the finance minister of Uganda, argues that the nation’s “growing debt is sustainable, and the country is not at risk of losing state assets to China.”
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.
Citing the new public debt assessment by Uganda’s auditor-general, 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. … Economist Fred Muhumuza says China’s foot in Uganda’s oil could be one way it decides to take back what is owed.
Uganda is one of the key participants in China’s BRI, which aims to revive the ancient Silk Road by linking Beijing to Europe and the Western Hemisphere through a massive network of land and sea routes.
As one of Uganda’s biggest country-lenders, China has an estimated $3 billion in development projects through state-owned banks.
In a bid to generate revenue, Uganda launched a campaign to attract some of the more than 500,000 Chinese tourists who visit Africa each year, the Daily Monitor reports, adding:
Uganda, through the Uganda Tourism Board (UTB) last year hired PHG Consulting-China, a market destination representative to sell Uganda’s tourism in the world’s second-largest economy.
The firm, which has already started work, is training local tour operators on how they can help to attract visitors from the Asian source market.
Uganda has hired the Chinese consulting firm to promote the African country in Europe, North America, German-speaking countries, China, Japan, and United Arab Emirates (UAE), granting Beijing even more power over its economy.
During the tourism campaign launch on Tuesday, Daudi Migereko, the UTB chairman, indicated that he wants to grow the current number of visitors to Uganda beyond the current 1.6 million.
“Our tour operators train to understand the spending types, budgets and what attracts Chinese,” he said.
“Our assignment is to grow the current number of visitors from 1.6 million. We believe tapping into the Chinese market will help us to increase the numbers,” Migereko added.
Uganda’s Ministry of Education is urging citizens of the African country “to learn what is considered by many to be the language of the future” Chinese Mandarin.
Uganda is not the first African country to worry about China seizing its assets.Through BRI, China gives out predatory loans collateralise with natural resources and strategic assets.
In December 2018, a leaked report revealed that Kenya promised China parts of its Mombasa Port as collateral for financing a $3 billion railway the African country built from the port to Nairobi.
The governments of both China and Kenya deny the report’s claims.
In September 2018, news reports surfaced that China was taking over the state power company in Zambia over unpaid debts, a revelation that “rippled across Africa, despite government denials.”
Its inability to pay back loans to state-owned Chinese firms reportedly forced the South Asian island nation of Sri Lanka to hand over a strategic port in 2017. Nearby Pakistan, considered China’s all-weather ally, is also at risk of losing strategic assets over its BRI fuelled debt to Beijing.
U.S. military and civilian government officials have described China’s BRI as a threat to the United States and its allies, noting that it can be used to expand Beijing’s economic and military influence across Latin America and Africa.
In December 2018, Yun Sun, the Director of the East Asia and China program at the Stimson Center think tank, cautioned American lawmakers that Beijing is using its economic clout in Africa to promote a “new international order” and encourage countries to adopt its communist ideology.
Editor’s note: The article reflects the author’s opinion only, and not necessarily the views of editorial opinion of Belt & Road News.