The World Bank has halted new loans to Uganda over the East African government’s enactment of anti-LGBTQ laws that include the death penalty in some cases.
The announcement by the bank comes three months after Ugandan President Yoweri Museveni signed legislation that includes life imprisonment for sexual acts and the death penalty for “aggravated homosexuality,” defined in part as engaging in sex if one is HIV-positive.
“Uganda’s Anti-Homosexuality Act contradicts the World Bank’s values,” the Washington-based lender said in a statement on Tuesday. “After reviewing our portfolio in the context of the new legislation, no new public financing will be presented to our board of executive directors.”
Uganda’s shilling dropped 0.9% to 3,651 per dollar by 12:53 p.m. in Kampala, the most among emerging markets worldwide, according to data compiled by Bloomberg.
The bank’s decision puts at risk support for Uganda’s plan to transform its economy and become an upper-middle-income country by 2040. The World Bank’s portfolio of International Development Association funding to the country was $5.4 billion at the end of 2022, according to information on its website.
LGBTQ rights are coming under increased pressure globally, with the Indian government opposing giving legal recognition to same-sex marriages amid a Supreme Court hearing on the matter and anti-transgender legislation passing in states across the US. In Kenya, President William Ruto in March criticized a pro-LGBTQ ruling by the nation’s top court, while Ghanaian lawmakers are considering punitive legislation.
Uganda’s representative to the United Nations, Adonia Ayebare, criticized the World Bank decision as “draconian” in a post on X, the social media network previously known as Twitter. He called for urgent reforms at the bank.
This is whimsical behavior by @WorldBank towards a member state. The values referred to in taking this draconian decision against Uganda are not universal, they are contested. This makes the case for reform of work methods including the board more urgent and pertinent.
— Adonia Ayebare (@adoniaayebare) August 8, 2023
The World Bank’s engagements with Uganda include the following:
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The International Finance Corp., the bank’s private lending arm, committed $170.6 million in investment and advisory services as of June 2022
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The Multilateral Investment Guarantee Agency, a World Bank Group member, had a gross exposure of $463.8 million at the end of last year.
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Recently approved IDA funding includes $566 million for an urban development programme, $354.7 million for a climate and farming project, and $217 million to support women’s enterprises.
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