The Bank of Uganda has informed Parliament that the Uganda shilling has remained stagnant since the World Bank announced the suspension of new loans to the country following the passing of the Anti-Homosexuality Act.
“Following the pronouncement by the World Bank regarding new financing as a result of the Anti-Homosexuality Act, that they wouldn’t be funding any new loans in Uganda, that had an impact on the exchange rate. We saw the exchange rate depreciating from about 3650 to nearly 3750 in a period of two days,” said Michael Atingi-Ego, Deputy Governor Bank of Uganda.
He further explained that the exchange rate has remained at that level since then, leading to pressures and uncertainties surrounding the currency due to the passing of the Anti-Homosexuality Act.
In August of this year, the World Bank Group announced a pause in public financing to Uganda in response to the country’s adoption of the Anti-Homosexuality law.
The law criminalizes homosexual activities in Uganda.
The World Bank stated that Uganda’s Anti-Homosexuality Act fundamentally contradicts the group’s values, and as a result, no new public financing would be presented to its board of executive directors until the effectiveness of additional measures has been assessed.
“We believe our vision to eradicate poverty on a livable planet can only succeed if it includes everyone irrespective of race, gender, or sexuality. This law undermines those efforts. Inclusion and non-discrimination sit at the heart of our work around the world,” the lender said in its statement.
The World Bank conducted a review of its portfolio in Uganda following the enactment of the law.
As a result, the bank determined that additional measures are necessary to ensure that projects are implemented in alignment with its environmental and social standards.
The decision by the World Bank aims to protect sexual and gender minority groups from the discriminatory effects of the law, which has faced criticism from human rights groups and the West.
“Our goal is to protect sexual and gender minorities from discrimination and exclusion in the projects we finance. These measures are currently under discussion with the authorities,” the World Bank stated.
The lender also mentioned that it would enhance third-party monitoring and grievance redress mechanisms to take corrective action as necessary.
It is worth noting that the World Bank had faced pressure from the U.S Congress to halt new loans for Uganda until the country repealed the anti-homosexuality legislation.
Additionally, U.S President Joe Biden had warned that Uganda risked facing economic sanctions over the anti-gay law