World Bank will stop loaning to Uganda because of its new anti-LGBTQ laws

The World Bank has been a major financial supporter of the East African country of Uganda.

World Bank will stop loaning to Uganda because of its new anti-LGBTQ laws
Revellers of the LGBTQ+ community protest against Uganda as they take part in the annual Christopher Street Day Pride march (CSD), in Munich, June 24, 2023. REUTERS/Fariha Farooqui/File Photo

The backstory: The World Bank has been a major financial supporter of the East African country of Uganda. By the end of last year, it had provided the country US$5.4 billion in International Development Association financing, which was supposed to help the developing country with different projects to benefit its people. According to the International Monetary Fund (IMF), 22% of the country’s government spending comes from international grants and financing.

More recently: Toward the end of May, Uganda President Yoweri Museveni passed a new anti-gay law. The law made it so that people who just identify as LGBTQ+ aren’t criminalized, but it does order the death penalty for “aggravated homosexuality.” Within this law, that could mean same sex acts involving people infected with HIV, minors and other vulnerable people – even with full, otherwise legal, standards of consent.

The law was pretty much immediately flagged by international human rights groups, which said it’s unnecessary in a country where homosexual activity is already punishable by life in prison. When the law was approved, the World Bank quickly sent a team over there, and it decided that it would need to take some steps to ensure Uganda’s funded programs worked within its standards. In June, the World Bank got a new president, Ajay Banga, and he’s been pressed on countering Uganda’s new anti-gay policies. On June 15, 170 activist groups came together to push World Bank action, even suggesting for it to put its foot down on future lending.

The development: After ongoing conversations between the World Bank and Ugandan officials, the World Bank just announced that it would be cutting off new loans to Uganda in response to these anti-LGBTQ+ provisions, which it says don’t line up with the bank’s core values. Projects in the fields of health and education will probably end up affected by this decision. While existing loans and funds will still go out, new ones won’t be issued.

The bank also said that it would reconsider this move pending new legislation that addresses these worries. After this lending pause was announced, Uganda immediately opposed the measure, saying that it wasn’t justified and didn’t make sense based on other countries that the World Bank continues to work with that have similar or stronger laws. The anti-gay law has been challenged, but there haven’t been any court hearings on its repeal yet.

Key comments:

"No new public financing to Uganda will be presented to our Board of Executive Directors until the efficacy of the additional measures has been tested," the bank said in a statement. "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.”

"There are many Middle East countries who do not tolerate homosexuals; they actually hang and execute homosexuals. In the United States of America, many states have passed laws that are either against or restrict activities of homosexuality ... so why pick on Uganda?" said Uganda's state minister for foreign affairs, Okello Oryem. "The World Bank has been put under pressure by the usual imperialists."