The recent suspension of World Bank loans to Uganda due to its contentious anti-gay law has attracted widespread interest and stirred passionate debate. The World Bank, which controls a $5.2 billion portfolio and has lent more than $10 billion in funding to the East African nation since 1963, decided on August 8, 2023 to freeze new loans to Uganda in response to the passing of legislation that criminalizes homosexuality. The World Bank’s decision has focused attention on Uganda’s stance on homosexual rights and its partnerships with international institutions.
President Yoweri Museveni signed Uganda’s anti-gay bill, officially known as the Anti-Homosexuality Act, into law on May 29, 2023. The legislation severely punishes homosexual behavior including life imprisonment for repeat offenders. It also makes the promotion of homosexuality illegal and requires people to disclose any information about homosexual activities within 24 hours.
The World Bank explained its decision to cease funding to Uganda by the fact that the bill “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.”
However, Museveni, who has been President of Uganda since 1986, viewed the World Bank’s position as “financial pressure” declaring in a recent statement that the country was trying to reduce borrowing and would not yield to pressure from foreign institutions.
“It is terrible that the World Bank and other players would dare to try and use financial pressure to get us to give up our beliefs, culture, ideals, and sovereignty. They don’t appreciate any African,” he said.
Furthermore, Museveni has claimed that foreign loans and aid packages “are either of no value to the country or are even anti-growth all together” and, according to him, should Uganda need to borrow money, it could turn to other sources, and the oil production that is anticipated to begin in 2025 will also raise more money.
Critics have commented that in the case of Uganda, the suspension of aid will not result in substantive reform but instead will worsen poverty and inequality. Others have said that the suspension will disproportionately harm Uganda’s most vulnerable groups because so many World Bank-funded programs aim to reduce poverty and increase access to essential healthcare and education services. They note that by withholding financing, the World Bank is penalizing Ugandans as opposed to the administration that enacted the anti-gay law.
Henry Okello Oryem, Uganda’s State Minister for Foreign Affairs, criticized the World Bank’s actions as being “hypocritical” in an interview with DevelopmentAid.
“Western organizations were quick to educate weaker nations about democracy but then swift to penalize them when they disobeyed the wishes of Western powers and their allies. The measure was passed by the Ugandan Parliament which is the representative of the people. That’s what democracy means.”