Uganda is currently in discussions with the World Bank, focusing on various aspects including human rights compliance, particularly concerning anti-gay legislation, financial agreements, accountability, and reliance on low-cost financing from the World Bank.
Uganda is taking steps to address issues that were previously overlooked during World Bank review missions. These efforts aim to secure funding to accelerate the country’s development goals. The country, which undergoes regular World Bank missions, has faced challenges in achieving sustainable development objectives. This has led to the lender’s decision to halt financing for new projects, especially following the enactment of anti-gay legislation.
According to an anonymous source close to the World Bank, while the government has occasionally complied with inflation, fiscal, and monetary policies, it has often fallen short in delivering value for money and quality services.
Uganda is now seeking agreements before proceeding with the World Bank.
Red Flag
The World Bank expressed serious concern about Uganda’s Anti-Homosexuality Act 2023, noting that it could create barriers to medical care, disease screening, and precautions, endangering people. The bank emphasized its commitment to non-discrimination and inclusion in pursuit of ending poverty.
The controversial law includes the death penalty for “aggravated homosexuality,” defined as same-sex relations with an HIV-positive victim.
The government, however, believes it can offset the loss of World Bank financing by boosting domestic trade and reducing poverty, a perspective disputed by economic experts. President Museveni has criticized the World Bank’s decision as a provocation aimed at intimidating the country.
Meeting of Minds? The Treasury claims to have reached an agreement with the World Bank through formal meetings. Finance Minister Matia Kasaija expressed optimism about the ongoing negotiations. However, sources within the Uganda Chapter of the World Bank and the International Monetary Fund’s Parliamentary Network dispute this, stating that no concrete agreement has been reached.
Reputable sources suggest that the World Bank remains firm in its demands, insisting on Uganda addressing issues such as accountability, corruption, and human rights.
Give and Take Some legal experts argue that while governments have the right to protect their sovereignty, they are not bound by specific lenders. Uganda, heavily reliant on donor funding, may have limited choices but to adhere to the World Bank’s conditions.
Geoffrey Ekanya, the chairman of the Parliamentary Network on the World Bank and IMF Uganda Chapter, noted that the only commitment made was to engage in further discussions until an agreement is reached. He emphasized that future financing should consider timely service delivery, report submission, and human rights concerns.
“Better the Devil You Know” Ugandan economists stress that without the World Bank’s low-cost financing, which offers long maturity periods and minimal interest rates, Uganda cannot meet its financial obligations.
There was already tension between the Ugandan government and the World Bank due to issues with the anti-gay law. Economist Dr. Fred Muhumuza argues that negotiations must now include safeguard measures to ensure inclusive support for Uganda.
Sources at the Treasury indicate that the government is eager to engage with major banks to secure syndicated loans and potentially issue Eurobonds.
Management of Cases
Uganda has realized that some police officers mishandle cases related to homosexuality and aggravated homosexuality, resulting in unfair convictions. The Director of Public Prosecutions has issued guidelines clarifying that the Anti-Homosexuality Act only criminalizes sexual acts, not mere identification. Officers have been instructed to seek legal opinions before charging individuals under this law.
Background
The World Bank, with 189 shareholders, has funded development projects for member countries with per capita incomes below $12,535. Uganda’s per capita income in 2022 was estimated at around $850. In May, the World Bank decided to withhold new funding to Uganda due to the enactment of the anti-gay law, a decision that drew criticism from state actors who felt it contradicted the bank’s commitment not to base decisions on political grounds.