Uganda’s harsh law outlawing homosexuality is undermining foreign direct investment and tourism inflows, hurting attempts by authorities at meeting objectives under an International Monetary Fund program, the lender warned.
Passage of the Anti-Homosexuality Bill, or AHA, could have a larger-than-anticipated impact on the availability of external grants and loans, the Washington-based lender said in a report following a fifth review under a $1 billion extended credit facility.
“Tighter external financial conditions, a larger-than-expected impact of the Anti-Homosexuality Bill on the availability of external financing and tourism, and the impact of climate shocks on agriculture, could jeopardize growth and attainment of program objectives,” the IMF said. “The passing of the AHA has led to a negative reaction among development partners and donors, complicating the financing landscape.”
Uganda’s anti-LGBTQ law penalizes people for offenses including promoting and facilitating same-sex relations, with punishments including life sentences and even death for so-called “aggravated homosexuality.”
The World Bank has suspended new loans to Uganda over the law, while the US issued an advisory cautioning private investors about business and reputational risks of working in the East African nation. It has also excluded Uganda from the preferential African Growth and Opportunity Act trade deal.
Uganda’s Constitutional Court is hearing three petitions challenging the legislation on the basis that it infringes on Constitutional rights and freedoms.
The IMF review unlocked $120 million for Uganda, bringing disbursements to $870 million since it approved the program in June 2021.
Meanwhile, Ghana has also passed a similar anti-LGTBQ+ Bill with the bill yet to be assented to by the President, Nana Akufo-Addo.
According to the country’s Finance Ministry, assenting the bill could result in significant financial setbacks for Ghana, with an estimated loss of $3.8 billion over the next five to six years.
The Finance Ministry asserts that the impact of the bill on Ghana’s financial landscape would be profound. Notably, the nation stands to lose substantial World Bank financing, including a projected loss of $600 million in budget support for 2024 alone, alongside $250 million earmarked for the Financial Stability Fund.
Such losses would undoubtedly strain Ghana’s foreign exchange reserves and jeopardize exchange rate stability, further exacerbating economic challenges.
The IMF has refused to comment on the country’s anti-LGBTQ+ Bill until it becomes law.
“Our internal policies prohibit discrimination based on personal characteristics, including but not limited to gender, gender expression, or sexual orientation. Like institutions, diverse and inclusive economies flourish.
“We are watching recent developments in Ghana closely. We cannot comment on a bill that has not yet been signed into law and whose economic and financial implications we have yet to assess,” the Fund quipped in a statement.
Managing Director of the IMF, Kristalina Georgieva, during her visit to Ghana on Monday, March 18, 2024, evaded questions posed to her on the country’s anti-LGBTQ Bill.
“At this point, what we know is that citizens in Ghana have challenged the constitutionality of the proposed law, I will not comment on the details of the bill. Let’s see what the court have to say,” she told journalists.