• Contact Us
  • About Us
  • Advertise
  • Donate
  • Login
Watchdog Uganda
  • Home
  • News
    • National
    • Politics
    • World News
    • Media Outreach Newswire
    • Africa News
    • Tourism
    • Community News
    • Luganda
    • Sports
      • Football
      • Motorsport
  • Op-Ed
    • #Out2Lunch
    • Conversations with
    • Politics
    • Relationships
  • Business
    • Agriculture
    • CEOs & Entrepreneurs,
    • Companies
    • Finance
    • Products
    • RealEstate
    • Technology
  • Entertainment
    • Lifestyle
  • People
    • Showbiz
      • Salon Mag
  • Special Report
    • Education
    • Voices
  • Reviews
    • Products
    • Events
    • Hotels
    • Restaurants
    • Places
  • WD-TV
  • Donate
  • China News
No Result
View All Result
  • Home
  • News
    • National
    • Politics
    • World News
    • Media Outreach Newswire
    • Africa News
    • Tourism
    • Community News
    • Luganda
    • Sports
      • Football
      • Motorsport
  • Op-Ed
    • #Out2Lunch
    • Conversations with
    • Politics
    • Relationships
  • Business
    • Agriculture
    • CEOs & Entrepreneurs,
    • Companies
    • Finance
    • Products
    • RealEstate
    • Technology
  • Entertainment
    • Lifestyle
  • People
    • Showbiz
      • Salon Mag
  • Special Report
    • Education
    • Voices
  • Reviews
    • Products
    • Events
    • Hotels
    • Restaurants
    • Places
  • WD-TV
  • Donate
  • China News
No Result
View All Result
Watchdog Uganda
No Result
View All Result

COVID-19: East Africa needs loan repayment holiday of 3 years to revive collapsing economies-Experts 

Stephen Kalema by Stephen Kalema
5 years ago
in Business, Finance
2 1
ShareTweetSendShare

East African economies have been severely affected by the outbreak of Covid-19. Since March this year when the first case of Covid-19 was reported in East Africa. Production, bank services, both domestic and international trade routes were disrupted which caused a sharp decline in key export prices, and severe disruptions to other economic activities all over the region and African at large.

As a way of confronting the economic havoc wreaked by the Covid-19 pandemic, East Africa’s Finance Ministers have signed many loans from the western donors and at the same time applied for loan forgiveness and debt repayment holidays.

Currently, International Monetary Funds (IMF) and World Bank have lent out some huge sums of money to East African countries and most of the money borrowed has been allocated for Covid-19 responses and budget support.

As per now the declared money borrowed by all economies in East Africa is over USD3bn where a portion of it has been injected in the economies to redeem them from collapsing while another to fight against the pandemic.

Currently, they are only three countries in the East African Community that have borrowed money. Kenya has the lion’s share almost signed over USD1.5bn loan as if that is not enough on 20th May 2020, World Bank approved another loan of USD1bn, to strengthen their dwindling foreign reserve and to curb the continuous weakening of the Kenyan shilling.

Uganda takes the second place with over USD600bn plus another proposal of USD 300m tabled by Finance minister Matia Kasaija in Parliament on Tuesday. Rwanda has so far borrowed over USD300bn.

However, according to experts, such a huge amount of money may not be able to be paid back while at the same time building up these dilapidated economies back to normal, there must be a debt repayment holiday of at least two to three years.

In an interview with this website recently,  minister Kasaija said that the only way East African economies may survive is to secure debt repayment holidays from donors for over two years.

“We are trying to secure debt repayment holidays, however, I’m not sure if they will accept, but we are trying,” he said.

More reports have revealed that not only East African economies that are in huge debts but most African government are campaigning for debt cancellation and payment holidays.

However, their hopes to see that the benevolent western donors clear some of their loans to zero is likely to be sabotaged by China, due to its huge debts on East Africa and African countries at large.

This simply means that even if Western donors approval the plea of East African leaders to have debt repayment holidays, it may not create any impact if the big donor China has not cancelled its loans too.

China has been lending Africa for over two decades and currently is the number one creditor to Africa, therefore any comprehensive debt deal, including write-offs, would require China to take a leading role and swallow some huge losses.

As of 2018, 20 per cent of Africa’s debts are owed to China. According to reports from Africa Growth Initiative, although China is a member of the IMF and World Bank and would like to participate in the collective debt relief, it’s unlikely to take a unilateral approach to debt forgiveness.

China’s loans to East African countries

In the past decade, East African economies have borrowed over USD29.42 bn from China to grow their transport, communication, manufacturing and energy sectors.

Data reports from the China-Africa Research Initiative (Cari) at John Hopkins University indicates that Kenya owes China USD9.8 billion, Uganda owes USD2.96 billion, Tanzania USD2.34 billion, Rwanda, South Sudan and Burundi owe China the least amounts USD289 million, USD182 million and USD99 million respectively.

According to the financial reports from Beijing, given the magnitude of the Chinese loans in East Africa, even partial forgiveness will create major financial losses for China, yet her economy has also suffered tremendously from the Covid-19 that has also retarded her domestic economics and the trade war with the United States.

IMF reports prove that major western countries with bigger economies can afford to grant debt relief to least developed economies because their loan terms were not like that of China. However, a large part of China’s debt to Africa has stringent commercial terms which can be hard for China.

Secondly, China itself is still an emerging economy with per capita income of USD10,153 in 2019, below the average of USD45,447 for the top seven major economies.

The third factor that may also complicate China’s will to debt relief to Africa is the recent domestic controversy of Chinese nationals’ racial segregation against Africans in China. Experts say that China’s move to zero out its debts to Africa may spark a domestic riot by Chinese nationals blaming their government for squandering their taxpayers’ money to appease African nationals who not fully appreciating.

However, according to Yun Sun the Chinese foreign policy expert, in the past year, China has always been forgiving zero-interest loans for poor and least-developed countries in Africa. In 2005, China announced forgiveness of USD10 billion zero-interest loans for Africa.

By the first quarter of 2009, China had cancelled 150 such loans owed by 32 African countries. In 2018, Chinese President Xi Jinping announced forgiveness of all intergovernmental zero-interest loans for least-developed African countries that have diplomatic relations with China.

“Debt forgiveness by China without similar forgiveness by other lenders is seen as neither fair nor feasible: China certainly will not allow itself be singled out as the only party that needs to provide the debt relief in these other areas to Africa. Why should China carry the quite substantial financial loss alone?” she asked while on Focus on Africa last month.


Do you have a story in your community or an opinion to share with us: Email us at editorial@watchdoguganda.com
ShareTweetSendShare

Related Posts

Business

See #Paradise Island Resort: Sudhir’s Luxurious Eco-Retreat Island on Lake Victoria

6th July 2025 at 15:29
Business

CAN JOHN BOSCO MUWONGE CLAIM A SPOT AMONG AFRICA’S WEALTHIEST?

5th July 2025 at 18:09
Hon. Raphael Magyezi
Agriculture

Yara East Africa and Asili Agriculture Launch Agri-Hub in Kiryandongo to Advance Farmer Knowledge and Food Security in Uganda

4th July 2025 at 19:06
Next Post
Lilian Namusoke Magezi

Family’s experiences of harmony and disharmony during the lockdown

  • Prostitution in Uganda- Courtesy Photo

    10 dangerous hotspots known for prostitutes in Kampala

    1114 shares
    Share 446 Tweet 279
  • Silent Billionaire Bosco Muwonge Buys Mukwano Arcade at UGX 250 Billion Cash Down

    40 shares
    Share 16 Tweet 10
  • LIST: New salary structure for civil servants starting July 2020 out; scientists, lecturers get juicy pay rise

    2286 shares
    Share 914 Tweet 572
  • Uganda’s Billionaires 2025: Once Again Sudhir Ruparelia Leads a Resilient Pack

    45 shares
    Share 18 Tweet 11
  • LIST : Gov’t releases Revised Salary Structure for Teachers, Police, and Prisons Staff for FY 2024/2025

    120 shares
    Share 48 Tweet 30
Facebook Twitter

Contact Information

Watchdog Uganda is a portal for solution journalism, trending news plus cutting edge commentaries in the fields of politics, security, business, tourism, entertainment, technology, agriculture, climate change, environment, public health et al. We also give preference to Ugandan community news and topical discussions. The portal also publishes community news and topical discussions.

Email: editorial@watchdoguganda.com
To Advertise:Click here

Latest News

President Museveni underscores need to develop Martyrs’ birth places into pilgrimage and religious tourism sites 

6th July 2025 at 19:55

See #Paradise Island Resort: Sudhir’s Luxurious Eco-Retreat Island on Lake Victoria

6th July 2025 at 15:29

Check out

  • Trending
  • Comments
  • Latest
Minister Muruli Mukasa

LIST: New salary structure for civil servants starting July 2020 out; scientists, lecturers get juicy pay rise

24th May 2020 at 10:45
Pregnant woman

Shock as 17-year old boy impregnates his two sisters during Covid-19 lockdown 

17th June 2020 at 08:17
Sudhir Ruparelia is set to speak at business forum in United Kingdom

Billionaire Sudhir’s wisdom on how to invest in real estate

0

How a boy’s destiny turned from cotton grower to communications guru

0

President Museveni underscores need to develop Martyrs’ birth places into pilgrimage and religious tourism sites 

6th July 2025 at 19:55

See #Paradise Island Resort: Sudhir’s Luxurious Eco-Retreat Island on Lake Victoria

6th July 2025 at 15:29

© 2025 Watchdog Uganda

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • News
    • National
    • Politics
    • World News
    • Media Outreach Newswire
    • Africa News
    • Tourism
    • Community News
    • Luganda
    • Sports
      • Football
      • Motorsport
  • Op-Ed
    • #Out2Lunch
    • Conversations with
    • Politics
    • Relationships
  • Business
    • Agriculture
    • CEOs & Entrepreneurs,
    • Companies
    • Finance
    • Products
    • RealEstate
    • Technology
  • Entertainment
    • Lifestyle
  • People
    • Showbiz
      • Salon Mag
  • Special Report
    • Education
    • Voices
  • Reviews
    • Products
    • Events
    • Hotels
    • Restaurants
    • Places
  • WD-TV
  • Donate
  • China News

© 2025 Watchdog Uganda