World Bank Halts New Loans to Uganda Over Controversial Anti-LGBTQ Law

In response to Uganda's contentious anti-LGBTQ law, the World Bank has announced a suspension of new loans to the country. The lending institution, headquartered in Washington DC, revealed its decision on Tuesday, temporarily pausing project financing. This move comes pending a comprehensive assessment of the measures the World Bank had previously introduced to safeguard sexual and gender minorities against discrimination and exclusion within its projects.

In a formal statement, the World Bank expressed its fundamental disagreement with Uganda's Anti-Homosexuality Act, emphasizing that the law stands in stark contradiction to the core values upheld by the World Bank Group. The lender emphasized its unwavering commitment to the eradication of poverty on a sustainable planet, contending that such an aspiration can only be realized when it embraces inclusivity, regardless of race, gender, or sexuality. The anti-LGBTQ law was deemed antithetical to these objectives. The World Bank Group reaffirmed the centrality of non-discrimination and inclusion in its global endeavors.

As part of its response, the World Bank will heighten third-party oversight and implement mechanisms for addressing grievances, ensuring the ability to take necessary corrective measures.

The World Bank Group expressed earlier concerns about the anti-LGBTQ law's compatibility with its guiding principles. President Ajay Banga, who assumed office in June, confronted mounting pressure to address the legislation. Notably, a coalition of 170 civic organizations urged specific, tangible, and prompt actions, including the potential suspension of future lending.

The international condemnation of Uganda's anti-LGBTQ law has been robust, with human rights organizations denouncing it widely. The legislation stipulates the death penalty for specific homosexual acts, including transmitting HIV through gay sex, and imposes a 20-year prison sentence for "promoting" homosexuality. Despite strong domestic support for the law, concern has grown regarding potential resource withdrawals from partners like the World Bank.

These authorities have been actively seeking new funding from the country's leading multilateral lender for several months. The World Bank underscored that despite its temporary suspension of loans, its overarching mission remains steadfast: to support all Ugandans, unconditionally, in their pursuit of escaping poverty, accessing vital services, and enhancing their quality of life.

The United Nations Human Rights Office condemned Uganda's law as "draconian and discriminatory," foreseeing it as a catalyst for widespread violations of the rights of LGBTQ+ individuals and other marginalized groups. The United States has issued warnings about potential economic ramifications.

Though activists and scholars have mounted legal challenges against the law, the timing for court proceedings remains uncertain. Notably, homosexuality remains criminalized in over 30 of Africa's 54 nations.