Uganda losing business over anti-gay bill, US warns

Anti-homosexual activists march in Kampala on August 11, 2014 to demonstrate against the annulment of an Anti-Gay law by Uganda’'s constitutional court (AFP Photo/Isaac Kasamani)

Kampala (AFP) - The United States has warned Uganda that its efforts to pass new anti-gay laws are damaging the economy by scaring off investors.

Ugandan lawmakers have said they hope to submit new anti-homosexuality legislation before they break for December holidays, after a previous law that could have seen offenders jailed for life was struck down by a constitutional court on a technicality.

US Ambassador to Uganda Scott DeLisi said the controversy had damaged the east African nation's economy.

"This issue proved to be not only controversial, but it also undercut the nation's economic growth," DeLisi said in a speech, posted on the embassy's website.

"Tourists changed their destinations, conferences were relocated, coffee buyers moved away from the Ugandan brand, and more."

Ugandan President Yoweri Museveni has already said he has had second thoughts over reintroducing tough anti-homosexuality legislation, arguing that parliament needed to consider the impact on trade and economic growth.

DeLisi delivered the speech Monday during a reception for the Corporate Council of Africa, a business investment body promoting US-Africa trade. The United States is the single largest bilateral investor in Uganda.

"Prospective investors told me that concerns about the reactions of their boards and their customers caused them to rethink choosing Uganda as a partner," he said.

"Even President Museveni himself has cautioned legislative leaders to think carefully about how to address these difficult issues, lest their choices seriously undermine Uganda's economy, trade prospects and international reputation."

But Trade Minister Amelia Kyambadde assured the trade delegation that Uganda, where the anti-gay bill is largely popular, would find a "middle ground".

"It should not worry you," she was quoted as saying by the Daily Monitor newspaper. "We are going to sort it."

In September, Museveni had trouble finding a hotel room in Texas, where he had gone to address potential investors, after protests by gay rights activists.

Critics said Museveni signed the previous law to win domestic support ahead of a presidential election scheduled for 2016, which will be his 30th year in power.

Although very popular domestically, the previous law was branded draconian and "abominable" by rights groups and condemned by several key allies and donors including the European Union and United States.