The World Bank has suspended the provision of new funding to Uganda due to its adoption of highly stringent anti-LGBTQ legislation. The law, which includes severe penalties such as the death sentence for certain same-sex acts, is deemed by the World Bank to be in direct contradiction with its core values.

Consequently, the World Bank has opted to halt the disbursement of new funds until it can evaluate and implement measures aimed at preventing discrimination within the projects it financially supports. The World Bank currently maintains an existing portfolio of projects in Uganda totalling $5.2 billion, and these ongoing initiatives will not be impacted by the funding suspension.

Since the law’s enactment in May, it has faced extensive criticism from both local and international human rights organizations, as well as Western governments. However, it has garnered significant support within Uganda itself.

In response to the World Bank’s decision, President Yoweri Museveni of Uganda expressed his disapproval and pledged to explore alternative sources of credit. He also highlighted that Uganda intends to reduce its reliance on borrowing and will not succumb to pressure from foreign institutions that seek to undermine its faith, culture, principles, and sovereignty through financial means. He said:

"It is, therefore, unfortunate that the World Bank and other actors dare to want to coerce us into abandoning our faith, culture, principles and sovereignty, using money. They really underestimate all Africans."

Museveni emphasised that if the need for borrowing arises, Uganda can seek funding from other sources, with anticipated revenues from oil production, slated to commence by 2025, serving as an additional economic resource.

Museveni expressed the hope that the World Bank would reconsider its stance on the matter.

To address the potential financial ramifications of the funding suspension, the Ugandan government intends to present a revised budget for the fiscal year 2023-2024 (July to June) to parliament for approval. Junior finance minister Henry Musasizi informed lawmakers that the government plans to submit the revised budget within a week, seeking their endorsement.

In June, the United States responded to the enactment of the anti-LGBTQ law by imposing visa restrictions on certain Ugandan officials. President Joe Biden also ordered a review of U.S. aid to Uganda in light of these developments.

A significant number of African countries have laws and cultural attitudes that do not support or recognise the rights of the LGBTQ+ community. Many countries in Africa have legislation that criminalises same-sex relationships and activities, with penalties ranging from fines to imprisonment and, in some cases, even the death penalty.