Attorney General Kiryowa Kiwanuka has assured Ugandans that there is no way the Entebbe International Airport can be taken over by the Chinese government because Uganda has not defaulted on its obligation to pay for the loan acquired from Exim Bank of China.

Kiryowa was on Wednesday appearing before the Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) investigating alleged irregularities in the loan agreement that saw Exim Bank of China lend Uganda $200m (about sh708.9b).

Ugandans have reacted to media reports that the government had surrendered the only international Airport to China which would collect revenue to fund the repayment of the loan. The government has described recent media reports as false and assured Ugandans that the airport remains under the management of the Uganda Civil Aviation Authority (UCCA).

Kiwanuka told COSASE chaired by Nakawa West MP Joel Ssenyonyi that there is no way the airport can be taken over by Exim Bank of China because the loan repayment is supposed to commence on April 1, 2022.

“For anyone to say the airport is being taken, that is wrong and scandalous. We have not defaulted on the contract and the future of the airport is secured,” said Kiwanuka.

He told the MPs that having read through the loan agreement that was approved for signing by his predecessors, he sees nothing that is contrary to the provisions of the Public Finance Management Act, 2015.

This came after Kasilo County MP Elijah Okupa raised concern over the loan agreement after different government officials gave contradicting views to the committee.

Okupa said that the fact that finance minister Matia Kasaija told COSASE that the loan agreement was bad and needed to be renegotiated, statements contradicted by the Attorney General, leaves much for Ugandans to desire.

“I don’t know whether this contract is provided for in the Public Finance Management Act. I am also finding difficulty in who to believe between the Minister of Finance and the Attorney General,” said Okupa.

Kiwanuka however said that there was no breach of any provisions of the Public Finance Management Act in the process of signing the contract.

He also defended the clause in the contract which places arbitration in case of any legal issues to China and then any resulting appeal to be handled by Chinese courts. The MPs were worried that it places Uganda in a difficult situation to seek arbitration from China which is the lender.

COSASE chairman Joel Ssenyonyi speaks during the meeting. Photo by Miriam Namutebi

“I for one, don’t know of any existing problem with the Chinese judicial system. This is not between the Government of Uganda and the Government of China. China as a state did not lend us the money and we are not up as state against the state,” he noted.

Ssenyonyi said that Ugandans have been worried about the nature of the contract because it does not put arbitration in the hands of neutral people since Exim Bank of China is an institution of the Chinese government.

“As we interrogated this contract, we discovered a lot of challenges. The contract gave China an upper hand on arbitration which must be done in China and if it fails, it goes to the Chinese Courts. There is no neutrality in this,” Ssenyonyi said.

The Attorney General assured the MPs that his office is ready to argue Uganda’s case in any place around the world and hence no need to panic on China being having jurisdiction for matters of arbitration in case of any disputes on the Entebbe International Airport loan agreement.

The committee gave Kiwanuka up to the end of Thursday to submit the relevant documents that will guide them in writing a report to Parliament.