The World Bank, the largest source of budget support for Uganda, declared shortly after the law that it would no longer provide additional loans since it is against its core principles.
The anti-LGBTQ+ law passed in Uganda caused a $1.6 billion loss in the first 12 months of passing the law, according to a recent study. The law is one of the worst anti-LGBTQ+ laws, which even includes the death penalty.
The President of Uganda, Yoweri Museveni, signed the Anti-Homosexuality Act 2023 into law in May of last year. Same-sex relationships were already illegal in the country due to the laws from the colonial era. The new regulations provided some of the most severe punishments in the world for those who violated them.
The legal penalties for same-sex partnerships are life in prison and the death penalty for individuals accused of severe homosexuality, which includes having sex while HIV positive. Furthermore, campaigning for LGBTQ+ rights gets a maximum 20-year jail sentence.
The law has already resulted in many LGBTQ+ people experiencing job losses, house eviction, and loss of family support. It has also hurt the economy. According to a report published by Open for Business, an alliance of global companies committed to inclusion, after the first 12 months of passing the anti-LGBTQ+ law, Uganda lost between $470 million and $1.6 billion.
The losses from the legislation due to engaging in specific sexual activity is 3.2% of the gross domestic product and include foreign direct investment, trade, and tourism.
The World Bank, the largest source of budget support for Uganda, declared shortly after the law that it would no longer provide additional loans since it is against its core principles.
Additionally, the law makes matters worse for public health, aggravating the public health crisis and resulting in losses. It has increased the cost of policing and legal fees to implement it, not to mention the loss of human capital as people leave the country to avoid persecution.
The coalition said in a statement that although Uganda has already suffered significant losses, things will get worse economically if the Anti-Homosexuality Act 2023 remains in law without any amendments or attempts to get it eliminated. According to the statement, Ugandan officials should take these actions to future-proof their economy and make their country more livable for all citizens, not just LGBTQ+ people.
The group, which consists of a coalition of multinational corporations like Virgin Group Ltd., American Express Co., and AT&T Inc., conducts studies about how anti-gay policies affect the economy and commercial development.
This trend is likely to change the course of the country’s economy in the following years, with anticipated losses between $2.3 and $8.3 billion over five years due to the flight of talent and human capital, which raises additional costs associated with policing and the legal system. Uganda is facing many challenges in cultivating a diverse economy that attracts investors and tourists due to the Anti-Homosexuality Act 2023.
It estimates that the yearly direct cost of reduced foreign direct investment could range from $40 million to $75 million, and the annual cost of international aid could be $276 million or more than $1 billion. The Anti-Homosexuality Act has severely strained relations of Uganda with other countries, leading to funding suspensions by organizations like the World Bank.
In Africa, there is growing pressure for LGBTQ rights. Over 30 African countries have consented that same-sex sexual activity is illegal, and others are thinking about passing laws similar to the laws passed by Uganda.
The Constitutional Court of Malawi upheld legislation that criminalizes same-sex activity in June. Hundreds of people in Ghana took to the streets in the capital city of Accra on Tuesday, urging the highest court to speed up the implementation of an anti-LGBTQ+ law.
Uganda has already suffered significant losses due to the introduction of the law. It will only worsen if the Anti-Homosexuality Act is in law without any changes towards replacement.
