Uganda says exploration results show it has 31 million tonnes of gold ore worth an estimated 12 Trillion USD. A Chinese owned mining company will be the first to mine.
In a bid to boost the country’s economy, the Ugandan government has licensed Wagagai gold mining company, a Chinese firm to start producing gold products in Busia district. The company embarked on the construction of its gold refinery valued at USD200m in phases in the district in 2016. Muyita said that the discovered gold could start being mined immediately.
Is this a smart move or a forced move?
China, Africa’s largest trading partner and the largest bilateral lender for public sector loans in the continent, is many times accused of “debt trap diplomacy” in its lending to Africancountries. One reason is the secrecy surrounding its loan contracts, which are rarely made public.
The situation is not unique to Uganda. In neighboring Kenya, people are worried that the Port of Mombasa is listed as collateral for a railway loan from China’s Export-Import Bank and that the lender would seize it on default.
From 2000 to 2020, Chinese financiers signed 1,188 loan commitments worth $160 billion with African governments and state-owned companies, according to Boston University’s research. The biggest borrowers were Angola, Ethiopia and Zambia, the data showed.
China is often accused of “debt-trap diplomacy
Angola – It is the most indebted African country, as per the African insider, with an estimated debt of $25 billion (about Sh2.5 trillion). The Southern African nation has appeared to struggle to pay off this debt, with reports most of the sales from its oil are channeled towards repayment.
Late last year, local and international media reported that Uganda’s Entebbe International Airport was at risk of being taken over by China upon default on a loan for the upgrade and expansion of the airport. The controversial news was even turned into a skit by The Daily Show.
From 2000 to 2020, Chinese financiers signed 1,188 loan commitments worth $160 billion with African governments and state-owned companies, according to Boston University’s research. The biggest borrowers were Angola, Ethiopia and Zambia, the data showed.
