World Bank suspends funding to Uganda over anti-LGBTQ law

The bank said the law was in opposition to its values and goals.

World Bank suspends funding to Uganda over anti-LGBTQ law
Image credit: The World Bank. 
Editor’s note: This story is part of Mariblock’s “State of Fiat” coverage. Digital assets such as bitcoin are seen as competitors to central bank money. Therefore, we consider informing our audience of the state of their local currencies worthwhile.

The World Bank has said it would suspend new lending to Uganda over the country’s controversial anti-LGBTQ law. The Bank added that the law — condemned by many countries and the United Nations — contradicts its values.

Quick facts

  • In a press release, the bank stated that the new act undermines its goal to eradicate poverty for all people, irrespective of race, gender, or sexuality.
  • The bank added that the suspension was the aftermath of the report of a team it had deployed to Uganda to explore how the new legislation could affect the bank’s projects in the country.
  • World Bank president Ajay Banga, who resumed office in June after the law was enacted, was urged by over 170 civic groups to take action in response to the law, including suspending future lending.

Key quote

  • The bank said:
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 ... No new public financing to Uganda will be presented to our Board of Executive Directors until the efficacy of the additional measures [to protect gender and sexual minorities] has been tested.”

The response

  • The Ugandan government has dismissed the move as unjust and hypocritical in response.
  • Okello Oryem, Uganda’s minister of foreign affairs, said the Bank also lends to countries in the Middle East and Asia with the same or harsher laws on homosexuality.
  • He said:
“There are many Middle Eastern 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?”

Before now

  • Uganda’s president, Yoweri Museveni, signed the Anti-Homosexuality Act 2023 into law in May. The Act introduced capital punishment for anyone arrested for engaging in “aggravated” homosexual acts and jail term for other related offenses.
  • The signing of the law spurred widespread criticism from several foreign bodies with threats of sanctions to be imposed on the country.
  • The Bank Information Center particularly urged the World Bank and the African Development Bank to immediately suspend all forms of financing to the country because it believes the law contradicts the goals of both organizations.
  • The World Bank is considered Uganda’s biggest lender, having loaned a total of $1.4 billion to the country between January 2018 and June 2021.
  • Some of the World Bank’s projects in the country include the Ugandan COVID-19 Response and Emergency Preparedness Project and the Ugandan Rural Electrification Project, among 28 others, information on the bank’s website shows.
  • Last week, the World Bank also announced that it was suspending all disbursements to Niger citing political tensions arising from a military takeover.

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