Infrastructure
Shock as Sierra Leone walks out on $300m airport deal with China
The project has been facing criticism from citizens and foreigners who view it as a waste of money.
Sierra Leone has cancelled plans to build a $318 million China-funded airport outside the capital Freetown in an incident that has sent shock waves throughout Beijing’s largest financial institutions.
The Mamamah International Airport, whose construction began in March this year, was being undertaken by state-backed China Railway Seventh Group, with funding from China Exim Bank.
The project that was due for completion in 2022 involved building a new city and an economic zone near the airport to among other things enhance competitiveness and improve on investment climate of Sierra Leone as the country strives to become a Middle Income state by 2035.
However, the Mamamah International Airport project has been facing a barrage of criticism from citizens and international lenders who view it as a waste of taxpayer money.
The World Bank and the IMF have argued that new airport is an unnecessary economic burden on the country that is struggling to pull through from effects of a decade-long civil war.
China, however, argues that the project should not be seen as just a new airport but as a key pillar of sustainable economic development.
“This is not only just about commissioning an airport project, it is also about launching a transformative economic and social development, including investment, tourism as well as a new economic zone and airport city,” China’s ambassador in Freetown Wu Peng said in an interview.
The Chinese government, Wu said, had agreed on a favourable repayment schedule to ease the burden on Sierra Leone. He said Beijing would provide a $30 million grant to mitigate the effect of the interest rate of the lifecycle of the Mamamah International Airport project.
However, despite the ‘favourable’ contract, Sierra Leone has now opted out of the pact – becoming the first African State to cancel an already declared China-backed deal.
“It is uneconomical to proceed with the construction of the new airport when the existing one is grossly underutilised,” Sierra Leone’s Aviation Minister Kabineh Kallon said in statement on Wednesday, adding that it is more sensible to renovate the main airport in Lungi instead.
Lungi International Airport is separated from Freetown by an estuary that necessitates a ferry or boat ride to reach the city. This according to Earnest Bai Koroma-led government, which left power in April, is tedious and bad for tourism and investment.
Nevertheless, the new government, headed by President Julius Maada Bio, says Sierra Leone cannot afford to repay the loan – adding that priority should be to make Lungi airport viable.
It is not yet clear if there are any financial penalties associated with cancelling the deal.
Foreign ministry spokesperson Lu Kang said on Thursday the cancellation did not point to any rift between China and Sierra Leone, saying the project had only been in an exploratory stage.
“I don’t think this particular project should be overblown as an indication of problems between the Chinese and Sierra Leone governments,” Kang said.
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