Govt silent on Chinese deal

GOVERNMENT has not provided details about an agreement struck with a Chinese state-owned bank, amid speculation that the deal includes an option for a loan to upgrade Namibia’s Hosea Kutako International Airport.

The agreement was signed last Friday during President Hage Geingob’s state visit to China, during which he was accompanied by government officials and more than 60 business people.

The Presidency announced on Saturday that the finance ministry signed an agreement with Export-Import (Exim) Bank of China.

China’s Exim Bank wanted to fund Namibia’s cancelled N$7 billion contract to upgrade the Hosea Kutako International Airport outside Windhoek.

Government normally announces how much it is borrowing and what it plans to use the money for, but no such announcement was made about this agreement. The lack of information raises questions such as what exactly the funds will be used for, how much and for how long taxpayers will repay any loan that might flow from the agreement.

Several senior government officials who went to China complained over the weekend that they were kept in the dark about the possible loan.

Presidential spokesperson Alfredo Hengari pleaded ignorance about a possible loan agreement.

“The Presidency is not aware of the loan you are talking about,” he said.

Hengari, however, promised that the Presidency would address the “successful and historic visit” to China upon the President’s return.

A source familiar with the Chinese trip, said government is likely to borrow money to fund airport upgrades, but the costing of such upgrades were not yet finalised.

The person said Geingob and his team did not want to rush into concluding the transaction before the costing of the airport contract was done to avoid a repeat of issues that afflicted the previous airport deal.

The source said the cost of the airport upgrades would be lower than the N$7 billion of the initial contract that was cancelled in 2015 after allegations of corruption and bribery, including over N$100 million allegedly channelled into the pockets of senior government officials.

understands that another project that could be funded by China’s Exim Bank is the construction of the last phase of a two-lane highway to the Hosea Kutako International Airport.

The secrecy around the agreement followed President Geingob stating during his visit to China that government would be transparent and that procedures would be followed in state contracts.

has reported in the past how Exim Bank loans were structured and how finance minister Calle Schlettwein reportedly told the bank in 2015 during talks for a loan that the loan’s maturity period would be 13 to 20 years, with a grace period of three to five years and an interest rate of 2%, plus management fees of 0,25%.

It is unclear whether Schlettwein is in favour of the airport upgrades. He has in the past expressed reservations about the impact of adding N$7 billion to Namibia’s already high state debt. Schlettwein was unreachable for comment yesterday.

Hengari also announced other agreements that government struck during Geingob’s trip to China.

These include an agreement between the Namibian and Chinese governments for the establishment and operation of the China space tracking, telemetry and command station in Namibia.

Hengari said other agreements dealt with the provision of low-cost housing and the export of Namibian beef to China.

He also said Geingob visited the Beijing Aerospace City on 29 March 2018 and was awarded an honorary doctorate by the China University of Geosciences.

Geingob, according to a person who attended the gathering, was impressed with the Beijing Aerospace City.

Hengari said Chinese president Xi Jinping praised Geingob’s signature policy, the Harambee Prosperity Plan.

Jinping informed Geingob that Namibia was reclassified as a top tourism destination in China, and he would encourage Namibian tourism agencies and businesses to intensify their promotion activities in the country.

Jinping also invited Namibian businesses to participate in the China International Import Exposition scheduled for later this year, Hengari said.

The Presidency announced yesterday that Geingob also met China’s wealthiest man, Jack Ma, in Shanghai.

Ma, according to the Presidency, promised to invest in Namibia and to assist young entrepreneurs, as well as revisit the country. Ma visited Namibia last year.