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Uganda to Engage World Bank on Anti-LGBTQ Law Funding Decision

FILE - A gay Ugandan man holds a pride sign as he poses for a photograph in Uganda Saturday, March 25, 2023.

KAMPALA — Ugandan authorities say they will keep talking to the World Bank after the bank pledged to not release any new funds to the East African nation. The bank objects to a new anti-homosexuality law that critics describe as one of the harshest in the world.

Ugandan officials have expressed concern over the World Bank’s decision.

In a statement released Tuesday, the World Bank said Uganda’s recently passed Anti-Homosexuality Act fundamentally contradicts the institution’s values of inclusion and nondiscrimination.

The statement adds that the World Bank believes its vision to eradicate poverty can only succeed if it includes everyone, irrespective of race, gender or sexuality. It said Uganda's law undermines those efforts.

Jimmy Mugunga, spokesperson for Uganda’s Ministry of Finance, Planning and Economic Development, said Uganda has made concerted efforts to explain the intent and effect of 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.

So far, about $1.7 billion of the over $4 billion allocated to Uganda by the World Bank has been disbursed, raising concerns about whether the country would get the remaining amount.

The funding is used to improve health care, agriculture, roads, energy infrastructure and education in Uganda.

Mugunga said anything that takes away from development is worrisome.

“These are circumstances in which we find ourselves, and therefore we are proactively looking at methods of adaptability but also ways of making sure that we mitigate the likely impact, if any,” he said.

Economist Fred Muhumuza says the impact will be widespread, considering the World Bank's size and terms that cannot be easily replaced by other funders.

“When the World Bank gives you a loan and you put it in your central bank in dollars, you begin to convert it to local currency,” he said. “So, that stabilizes the shilling, because you have some sufficient dollars that people who need to import things can use. So, if the World Bank loans don’t come through, then we might see pressure on the exchange rate as well going upward.”

The World Bank said it remains committed to helping Ugandans escape poverty, access vital services and improve lives.

Frank Mugisha, an LGBTQ activist, told VOA he hopes the World Bank’s decision will help efforts to annul the Anti-Homosexuality Act. Mugisha is among nine petitioners who have filed a challenge to the act in Uganda’s Constitutional Court.