Ugandan President Yoweri Museveni lashed out at the World Bank Group after it decided to halt any new funding proposals due to the African country's new anti-LGBTQ law.
The global bank announced August 8 that it was suspending funding of new projects in Uganda, citing the anti-LGBTQ law "undermines" the bank's goals to "eradicate poverty on a livable planet."
Additionally, the bank is setting up mechanisms to assess and measure projects to ensure they are aligned with the organization's "environmental and social standards," according to a statement.
Reuters reported the bank's current investment portfolio in Uganda is $5.2 billion. Current projects will not be affected by the bank's decision. Distribution of the balance of funds to support health care, agriculture, roads, energy infrastructure, and education projects will continue.
Uganda's Parliament will conduct an emergency vote of a revised 2023-2024 (July-June) budget that will reflect the impact of the bank's loan suspension, junior finance minister Henry Musasizi told parliament August 10, according to Reuters. Musasizi told lawmakers that Uganda's government would submit the revised budget in a week or soon after.
Uganda's shilling plunged, taking its deepest dive in nearly eight years in response to the news, reported Yahoo Finance.
The law
Museveni signed into law May 26 in the face of warnings about the consequences of doing so, as the Bay Area Reporter previously reported.
The law calls for Ugandans to report on LGBTQ people, and carries stiff fines and prison sentences of 10 to 20 years for being suspected of being queer or promoting LGBTQ issues. The law also includes the death penalty for so-called aggravated homosexuality. "Aggravated homosexuality" means being caught having gay sex more than once or with a person under the age of 18.
Those who provide space for LGBTQ people to gather or who do not report suspected LGBTQ people can also find themselves in trouble with the law and could face long prison sentences.
Condemnation
After the law was signed, President Joe Biden condemned it, as did leaders of other Western nations. Biden threatened sanctions and other actions, placing billions of dollars in U.S. financial support for Uganda in jeopardy.
On May 30, the State Department announced the U.S. imposed visa restrictions against Ugandan officials.
LGBTQ Ugandan leaders immediately filed a lawsuit at the Constitutional Court after the law was made public in May, according to Outright International and Reuters, as the B.A.R. previously reported.
Nearly a dozen U.S. congressional leaders urged World Bank Group President Ajay Banga, who took office in June after the law was enacted, to "immediately postpone and suspend all current and future lending to Uganda" until the law is "struck down," in a July 25 letter, reported Reuters.
The letter was signed by Democratic Congressmembers Joyce Beatty (Ohio), Steven Horsford and Dina Titus (Nevada), Al Green (Texas), Brad Sherman (California), Brittany Pettersen (Colorado), Wiley Nickel (North Carolina), Jan Schakowsky (Illinois), Jim McGovern (Massachusetts), and D.C. Delegate to Congress Eleanor Holmes Norton. Gay Congressmember Mark Pocan (D-Wisconsin) was also a signatory.
The lawmakers joined more than 170 international organizations in calling on the World Bank "to act swiftly" as "a leader among multilateral development banks" to condemn the law, citing that it "mandates state-sponsored discrimination and violence against LGBTQ+ individuals, creating a humanitarian crisis that plainly violates World Bank stated policies."
The lawmakers argued that if the bank continued to lend money to Uganda, it "would signal to the Ugandan government, other governments considering similar laws, and LGBTQ+ people around the world that the World Bank does not truly value inclusion and that its commitments to non-discrimination are disingenuous."
The U.S. is a major sponsor of Uganda, financially supporting the East African country by investing nearly $1 billion annually and providing access to trade deals with the U.S. through the African Growth and Opportunity Act. In June, Biden ordered a review of U.S. aid to Uganda.
The Council for Global Equality, the Human Rights Campaign, Outright International, Rainbow Railroad, and Planned Parenthood Global were among the organizations that called on the World Bank to suspend loans to Uganda in a joint statement June 15.
The bank agreed with the congressional and human rights leaders.
"Uganda's Anti-Homosexuality Act fundamentally contradicts the World Bank Group's values. We believe our vision to eradicate poverty on a livable planet can only succeed if it includes everyone irrespective of race, gender, or sexuality. This law undermines those efforts. Inclusion and non-discrimination sit at the heart of our work around the world," the bank stated August 8.
The bank made its decision after deploying a team to Uganda "to review our portfolio in the context of the new legislation."
"That review determined additional measures are necessary to ensure projects are implemented in alignment with our environmental and social standards," the statement said.
Potential problems for Uganda
Museveni denounced the bank's decision, stating that the bank and the other institutions "underestimate all Africans," reported Reuters. He vowed to find alternative sources of funding, including banking on the oil production expected to start by 2025.
"It is, therefore, unfortunate that the World Bank and other actors dare to want to coerce us into abandoning our faith, culture, principles and sovereignty, using money. They really underestimate all Africans," he said.
Economist Fred Muhumuza told Voice of America the impact of the World Bank's actions will be broad and that it will not be easy for Uganda to replace the bank's resources with other funders.
In 2014, then-World Bank President Jim Yong Kim postponed a $90 million loan to the Ugandan government in response to Museveni's decision to sign a version of the Anti-Homosexuality Act that did not contain a death penalty provision, reported the Los Angeles Blade. The law was struck down by Uganda's Constitutional Court based on a technicality later that year, the B.A.R. reported at the time.
Jimmy Mugunga, spokesperson for Uganda's Ministry of Finance, Planning and Economic Development, told VOA that the Ugandan government has made efforts to explain the law to the World Bank and other institutions.
"The government believes in continued engagement, and despite the statement, what I know is that the Ministry of Finance will continue to engage the bank and any other parties so that more clarity is brought to bear," he said.
Frank Mugisha, the gay executive director of Sexual Minorities Uganda and a co-convener of Convening For Equality Coalition, confirmed in an August 9 statement that Uganda's Ministry of Health has made overtures to international funders to reassure them that it remains committed to non-discrimination in health care.
"The lived reality for LGBTIQ Ugandans living under this law tells a very different story — one filled with discrimination, fear, and violence because of this law and those who support it," Mugisha said. "The only way forward is for Uganda's courts to stand up for the principle of non-discrimination — already enshrined in our constitution — and rule that the law is unconstitutional as soon as possible."
Keep the pressure on
LGBTQ Ugandan activists were happy to hear the World Bank took a stand. They are hopeful that the bank's move will lead to repeal of the bill.
"There are no 'additional measures' which can make this law acceptable," Mugisha said.
Clare Byarugaba, coordinator of the equality and non-discrimination program at Chapter Four Uganda (https://chapterfouruganda.org/) and co-convener of CFE, agreed.
"The World Bank's decision to not proceed with any new public financing in Uganda in light of the Anti-Homosexuality Act is an important step by the international financial institution to respond to the pernicious impacts of Anti-Homosexuality Act," said Byarugaba. She added that other countries considering similar laws should take notice.
Ghana, Kenya, and some other African countries are considering similar laws.
"We hope that this will spur further action from others committed to inclusive economic development and the protection of basic human rights to take concrete action in the face of Uganda's horrific law," she continued. "Open and inclusive societies are better for business and better for economic growth."
The bank's halting any new investment in Uganda came six days after the United Nations announced closure of its human rights office in Kampala, Uganda's capital, according to an August 4 statement. Sub-offices in Gulu and Moroto also recently closed. The office and its satellite offices were closed because Uganda's government did not renew its agreement in February, against human rights defenders' protests.
"I regret that our office in Uganda had to close after 18 years, during which we were able to work closely with civil society, people from various walks of life in Uganda, as well as engaging with state institutions for the promotion and protection of the human rights of all Ugandans," stated U.N. High Commissioner for Human Rights Volker Türk.
Türk added, "On our part, the U.N. human rights office remains committed to working on human rights in Uganda, in line with my global mandate."
Two days later, Outright International released a call for assistance for local LGBTQ Ugandan organizations. The organization stated in the fundraising email that the law has incited a wave of violence against LGBTQ Ugandans. A queer activist from Freedom and Roam Uganda described the current situation in a video testimonial. FARUG is celebrating its 20th anniversary working with Ugandan lesbian, bisexual, and queer women.
To donate, click here.
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