The World Bank has officially resumed new lending to Uganda, reversing a nearly two-year freeze that was imposed in response to the country’s controversial Anti-Homosexuality Act (AHA). The decision follows a series of safeguards introduced by the Ugandan government to ensure that World Bank-funded projects do not discriminate against LGBTQ+ individuals.

Background: The Loan Freeze

In August 2023, the World Bank suspended all new project financing to Uganda after the country enacted one of the world’s harshest anti-gay laws. The Anti-Homosexuality Act included severe penalties for same-sex conduct, including life imprisonment and, in so-called “aggravated” cases, the death penalty. The move sparked international condemnation and concerns about the safety and rights of Uganda’s LGBTQ+ community. The World Bank said at the time that the law contradicted its core principles of inclusion and non-discrimination, and that its funds could not support development in an environment of systemic exclusion.

Uganda’s Response and Negotiations

Since the suspension, the Ugandan government engaged in extensive consultations with World Bank officials, seeking to restore access to vital development financing. Over several months, teams of World Bank analysts conducted field assessments and risk evaluations. While Uganda did not repeal the AHA, it committed to implementing mechanisms that would protect project beneficiaries from discrimination within Bank-supported programs.

Key Safeguards Put in Place

According to a statement from the World Bank, Uganda has now established several institutional safeguards to prevent discrimination in areas influenced by World Bank financing. These include third-party monitoring of project implementation, enhanced grievance redress systems allowing citizens to report abuses, and integration of non-discrimination clauses into project guidelines. Additionally, oversight committees will ensure that marginalized communities including sexual and gender minorities are not excluded from education, healthcare, infrastructure, or refugee services funded by the Bank.

New Projects Approved

With the safeguards in place, the World Bank’s Board of Directors has approved over $350 million in new development support to Uganda. The funding covers three major initiatives: a $150 million social protection program to aid vulnerable households, a $120 million education reform project aimed at expanding access and quality, and a $90 million initiative to support services for refugees and internally displaced people. These projects are expected to begin implementation later this year and are viewed as essential to Uganda’s economic stability and social development.

Global Reactions: Mixed and Measured

The World Bank’s decision has been met with mixed responses globally. Human rights organizations have voiced concern, arguing that the reinstatement of funding could be interpreted as tacit acceptance of Uganda’s anti-gay legislation. “The law is still in place, and LGBTQ+ people in Uganda remain at risk,” said an official from Amnesty International. “While safeguards in projects are important, they do not undo the broader environment of criminalization and fear.”

Conversely, Ugandan officials have hailed the move as a diplomatic victory and proof that the country can uphold its laws while still cooperating with international development partners.

“We are committed to inclusive growth,” said Finance Minister Matia Kasaija. “These projects will help us build schools, support vulnerable families, and serve refugees, all while respecting our national values.”

The Broader Debate: Rights vs. Development

The controversy underscores a deeper debate over the extent to which development institutions like the World Bank should condition aid on human rights practices. Critics say the Bank must do more to uphold universal rights, while others argue that disengagement punishes the poor and halts progress. The Bank has defended its decision by stating it found a workable balance: remaining engaged to support Uganda’s development while enforcing standards that minimize risk of discrimination within funded programs.

Looking Ahead

The Bank has emphasized that it will continue to closely monitor the implementation of the safeguards and remains committed to the principle of inclusion. Any evidence that LGBTQ+ individuals are being excluded or harmed by World Bank projects could prompt another freeze in funding.

For Uganda, the lifting of the loan suspension is a financial lifeline that brings much-needed investment in infrastructure and social welfare. But it also comes with heightened scrutiny. The true test lies ahead whether the promises of protection on paper will translate into real-world safety and inclusion for all Ugandans, regardless of their identity.

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