Uganda’s Shilling Plunges After Funding Cut Over Anti-LGBTQ Laws

Benjamin Harvey and Helen Nyambura
·2 min read
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(Bloomberg) -- Uganda’s shilling headed for the biggest drop in almost eight years as officials said they would need to revise the budget after the World Bank halted new funding to the country for its passage of anti-LGBTQ legislation.

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The shilling dropped 1.76% to 3,729.35 per dollar as of 12:40 p.m. in London, heading for the biggest one-day decline since Dec. 2015 and a fifth day of losses. Uganda will revise its 2023-2024 budget to take into account less financing after the World Bank blocked new lending, NTV Uganda reported, citing Ministry of State for Finance Henry Musasizi.

“We have taken a firm decision, and we have agreed that we will face the consequences,” NTV quoted the minister as saying. “We will soon be revising the budget, and we will be coming to you for support.”

Earlier in the day, President Yoweri Museveni said in a statement that Uganda would borrow from elsewhere if there was an “absolute need” for it, saying the country was more cautious than in the past when it took “completely unnecessary” loans. Museveni, 78, also defended the new legislation, saying it didn’t target “merely being a homosexual,” but instead targeted “going from a homosexual to recruit or coerce others into your deviance.”

The East African government’s latest legislation includes the death penalty for so-called “aggravated homosexuality,” defined in part as engaging in sex if one is HIV-positive.

The World Bank said in a statement on Tuesday that it would halt new funding because the act contradicts its values.

Read More: World Bank Halts New Funding to Uganda Over Anti-LGBTQ Laws

The bank’s decision puts at risk support for Uganda’s plan to transform its economy and become an upper-middle income country by 2040. The World Bank’s portfolio of International Development Association funding to the country was $5.4 billion at the end of 2022, according to information on its website.

LGBTQ rights are coming under increased pressure globally, with the Indian government opposing giving legal recognition to same-sex marriages amid a Supreme Court hearing on the matter and anti-transgender legislation passing in states across the US. In Kenya, President William Ruto in March criticized a pro-LGBTQ ruling by the nation’s top court, while Ghanaian lawmakers are considering punitive legislation.

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