Tanzania President cancels US$10billion Chinese loan; refers to the terms and conditions as one that can only be accepted by mad people.
Is Magufuli a demigod or the general African leadership has started stepping up to Chinese Killer loans? Let’s digest it. Few years back, African leaders developed a sudden inexplicable craze for Chinese killer loans with terms and conditions that beats logic. They sign loan agreements that they know very well they cannot pay back within…
Is Magufuli a demigod or the general African leadership has started stepping up to Chinese Killer loans? Let’s digest it.
Few years back, African leaders developed a sudden inexplicable craze for Chinese killer loans with terms and conditions that beats logic. They sign loan agreements that they know very well they cannot pay back within the agreed time frame but mostly proceed with the loans just for the kickbacks attached and the benefits some individual politicians stand to get from such contracts at the detriment of the development of their respective nations. In most cases, the defaulted loans lead to the seizure of major facilities to make-up for the amount involved.
Following a series of constructive criticisms by reputable organizations and general outcry by concerned African citizens about the dire consequences of these killer loans on the continent, some of the leaders seem to be taking certain commendable actions to save their dying reputations. Prior to the enlightenment and outrage by the African citizenry, the least was heard of African leaders or governments confronting China to loosen up their terms or face suspension of contracts but in recent times, they are building some courage to do the needful.
The Tanzanian head of state, John Magufuli cancelled a ten billion US dollar (US$10billion) agreement signed by his predecessor, Jakaya Kikwete with Chinese investors to construct a port at Mbegani creek in Bagamoyo, just north of Da es Salaam. The Chinese investors initially agreed with the erstwhile Tanzanian administration to build the said port on condition that, they will be granted a 30years guarantee, 99years uninterrupted lease with an attached outrageous demand that, the Tanzanian government will have absolutely no power to raise concerns on whoever invests in the port during the period stated.
This sounds very ridiculous, but it was actually signed by a certain government which raises the question of whether our lead negotiators read and understand agreements before appending their signatures. In the words of Magufuli, the above terms and conditions could only be accepted by mad people. in effect, He initiated a renegotiation with the investors to bring down the lease period to 33 instead of the initial 99 years negotiated.
The government equally stated clearly that there will be no tax or utility exemption for the investors as has mostly been the case in the parasitic China-Africa trade relations. Additionally, the investors will need the approval of the government in order to operate any new business at the port. The government issued a time frame which the investors failed to meet, resulting in the suspension of the agreement.
Aside Tanzania, it could be remembered that, the Julius Maada Bio lead administration in Sierra Leon equally suspended a $400 million airport construction agreement in 2018. He was quoted to have said that: “it is uneconomical to proceed with the construction of the new airport when the existing one is grossly underutilized”. Additionally, there have been several other resistances to Chinese backed contracts in Africa. The cancellation of a USD2 billion coal plant contract in Kenya, among few others are typical examples of the growing awareness.
Does this imply that there are no countries in Africa that are still taking these killer loans? No! some countries still sign such agreements, mostly at the blind side of the public and the consequences will soon be seen. The acknowledgement of the above bold steps taken is mainly to encourage the African leadership to move away from the killer loan mindset which is a looming neocolonial trap and focus more on transformational ideas to make good use of our resources. Even if they will consider signing such, they should come with reasonable and mutually beneficial terms.
Very brilliant and thanks for stepping up to lead in the right direction. Magufuli is a great leader, I hope he pipes down on his religious delusions and uses the supreme power he holds in that land to blaze a new trail for his successors.
Yes! There are quite a handful of African countries specifically Sub-Saharan countries that will still sign such agreements, Cameroon is definitely one of them.
Africans had rushed to China thinking it’s an alternative to the west but African leaders are not learning and realizing things are not what they seemed to be be with China. But some African countries still go to borrow these killer loans one of them is Zambia.
African leaders need to rally them selves to strengthen the weaker once to look and see ahead of them with what chaina is bringing ahead of them why should we allow chaina we see growing in front of us to just come and use us like fulls we Africans have all it takes to develop our selves even more than chaina we have natural rescues of what ever kinds why just we come together and do more than chaina we also have emence labour force to take the move we only need to be united and forged ahead African leaders don’t look for the billion US$ dollars offered it just a business game we worth more than that unity is golden
Comment: a reasonable leader. if most African leader could reason like you do, Africa will have developed like Europe.
All solutions to problems should be found within. Creating a problem to solve a simple problem or finding a temporary solution costs more. Africa let’s learn finding all solutions within Africa. You can not develop by borrowing
The killer terms were started bt the west countries and perfected by the Chinese. No western firm pays tax on their investments in Africa. Check that as well.
No global acting “western” company pays taxes in Europe or the US. Companies like Starbucks, McDonalds, Apple, Shell, BP… don’t pay taxes at all…..
I doff my heart to President John Magufuli. African leaders should be ashamed of pandering to the Chinese. What is this craze of always wanting loans instead of looking inwards to harness the vast mineral & human resources that Almighty GOD has so blessed Africa with.
We must stop electing unpatriotic & self-seeking leaders who are ready to mortgage their nations’ sovereignty & future because of personal inducements.
Nigeria particularly needs to awaken from the mindset of borrowing & borrowing under the guise of foreign investment.
U.S. has also pandered to the Chinese and it’s still happening. Who do you think is going to buy all the U.S. Stocks at a very low price. The Chinese own so many of our Congressmen – that’s why they never do anything about our businesses going overseas under the guise of “free enterprise” Trump is right. We really have been taken advantage of by the Chinese but I do feel badly for Africa. The Chinese own Ethiopia and that is why that Ethiopian henchman is in charge of the WHO. He is a joke.
Moderation? By whom? Mark Zuckerburg?
If Nigeria ceded Bakassi peninsula to Cameroon because of the stupid agreement that the former head of state (General Yakubu Gowon) signed with Cameroon, why should anyone think the contract will not be honoured by Tanzania? That will be possible if Tanzania will pay back the money that China has released to them so far. If Tanzania cannot pay back now, the contract cannot be nullified. It’s a loan which part of it has already been pumped into Tanzania.
Their only way of freedom is to pay back whatever has been given to them so far.
Ogaaa We didn’t receive any monie yet. thats why we have that power of put on trash this Agreement , this was like 6 yrs ago deal which was on hold as soon as our Beloved Magufuli came to power. so we have nothing to loose here
If Nigeria ceded Bakassi peninsula to Cameroon because of the stupid agreement that the former head of state (General Yakubu Gowon) signed with Cameroon, why should anyone think the contract will not be honoured by Tanzania? That will be possible if Tanzania will pay back the money that China has released to them so far. If Tanzania cannot pay back now, the contract cannot be nullified. It’s a loan which part of it has already been pumped into Tanzania.
Their only way of freedom is to pay back whatever has been given to them so far.
Maverick, Our president knows better than you think Bro and remember this is Tanzania not Nigeria. For your information everything was on Hold as soon as our beloved Magufuli came to power. And If we are needed to pay back anything i think our President is ready thats why he cancel the deal. And i’am sure we have nothing to pay back because nothing was done
Those “Mad people” are those ruling a nation called Nigeria at the moment.
Very proud of you, we pray for more leaders like you
Grear
Yeah, I left a reply to a post; but apparently, it had to be “moderated?” whatever that means.
There was no profanity and I was just agreeing with the author but like Zuckerburg has said, if anyone criticizes the WHO, the comment will be taken down as harmful speech. That’s amazing.
Whatever happened to free speech?
Finally an African Country I can visit and be proud of it’s leader…..
Jambo…salamu kubwa. Good Move. As long as China is not a democratic nation, and run by a commie party billionaires, no one can trust them anymore. Long live Africa.
Could not agree with you more, Sir!