The World Bank is pausing approval for new public finance projects in Uganda over the country’s adoption earlier this year of a widely criticized bill criminalizing same-sex conduct.
“Uganda’s Anti-Homosexuality Act fundamentally contradicts the World Bank Group’s values,” the development lender said in a statement Tuesday, adding that “no new public financing,” would be presented to the bank’s board of directors for approval for the time being.
The move comes after pressure from human rights organizations and members of the US Congress to take a tougher line with Kampala over the law, which is among the harshest of its kind in the world.
Uganda’s Anti-Homosexuality Act of 2023 contains provisions making “aggravated homosexuality” a capital offense and imposes penalties for consensual same-sex relations of up to life in prison.
“Our goal is to protect sexual and gender minorities from discrimination and exclusion in the projects we finance,” the World Bank said Tuesday, adding that it was in discussion with the Ugandan authorities over the issue.
At the end of July, several members of the US Congress called on World Bank President Ajay Banga to “immediately postpone and suspend all current and future lending to Uganda” until the law was struck down.
Following the passage of the bill, the US State Department updated its travel advisory, telling citizens to “reconsider travel to Uganda due to crime, terrorism, and anti-LGBTQI+ legislation.”
World Bank President Ajay Banga, who took office in June, faced pressure to respond to the legislation, with 170 civic groups urging “specific, concrete and timely actions”, including suspending future lending.
Human rights organisations have widely condemned the anti-LGBTQ law, which imposes capital punishment for “aggravated homosexuality,” an offence that includes transmitting HIV through gay sex, and 20 years in prison for “promoting” homosexuality.
In June, the US imposed travel restrictions on Ugandan officials in response to the legislation, which was signed by President Ugandan Yoweri Museveni.
Museveni, who has referred to homosexuality as a psychological disorder, has rejected international criticism of the legislation, which he has defended as necessary to stop the LGBTQ community from trying to “recruit” people.
The World Bank had provided $5.4 billion in International Development Association financing to Uganda by the end of 2022, including many health and education projects that could be affected by the new law.
The existing portfolio will continue to disburse funds, even as new lending is put on hold, a World Bank source said.
Private sector projects backed by the International Finance Corporation and the Multilateral Investment Guarantee Agency (MIGA) would proceed only “on a selective basis,” the bank said in a separate note to staff seen by Reuters.
It said the IFC and MIGA would also implement additional measures to “ensure inclusion and non-discrimination as needed.”
In its statement, the World Bank said it would significantly increase third-party monitoring and grievance redress mechanisms with regard to the Uganda portfolio to allow the bank to take corrective action as necessary.
The law was enacted in May and carries the death penalty for “aggravated homosexuality,” an offense that includes transmitting HIV through gay sex.