World Bank Resumes Lending to Uganda

The World Bank agreed to restart lending to Uganda almost two years after it suspended new loans to the East African country following its enactment of a harsh anti-LGBTQ law.

“The World Bank worked with the government and other stakeholders in the country to introduce, implement, and test measures that prevent discrimination in World Bank-funded projects,” a spokesperson for the Washington-based lender said in an emailed response to Bloomberg’s questions Wednesday. “We have now determined the mitigation measures rolled out over the last several months in all ongoing projects in Uganda to be satisfactory.”

The bank has prepared new projects to support social protection, education and those affected by forced displacement and will present them to its board to determine if they should be funded, the spokesperson said. The mitigation measures have been embedded in all the proposals.

The lender’s programs align with the government’s focus on agro-industrialisation, tourism, minerals, oil and gas, science, technology and innovation to grow the economy, Patrick Ocailap, the deputy secretary at the Treasury, told reporters in the capital, Kampala.

Partial funding for a planned 272-kilometre (169-mile) standard-gauge railway linking Kampala to Malaba on the Kenyan border will be unlocked, along with financing for other big projects, he said.

The World Bank suspended new loans to Uganda in August 2023 after the country enacted a law that imposes the death penalty on those found guilty of “aggravated homosexuality” — a measure the lender said contradicted its values.

The enactment of the legislation also cost Africa’s biggest coffee exporter its preferential trade access to the US. A top Ugandan court upheld the validity of the law last year, rejecting a challenge filed by a civil rights group and 10 individuals.

Separately, Uganda is in advanced talks with the International Monetary Fund for a new loan package, with the amount still to be negotiated, Ocailap said. A $1 billion three-year extended credit facility expired last year

Uganda’s focus on growing key sectors is expected to boost the size of the economy tenfold to $500 billion by 2040, according to the Finance Ministry.

By Bloomberg