The recently passed Anti Homosexuality Act has had devastating impacts on the Ugandan economy including the World Bank suspending offering Uganda new loans.

This move by the World Bank immediately after it was announced had a direct hit and negative impact on the country’s currency, the Shilling.

The Bank of Uganda has informed Parliament that following the pronouncement by the World Bank to stop approval of any new loans to Uganda after the passing of the Anti-Homosexuality Act, the Uganda shilling depreciated within two days & the depreciation has remained stagnant to date.

“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,” Michael Atingi-Ego, Deputy Governor, told Parliament.

“We saw the exchange rate depreciating from about 3650 to nearly 3750 in a period of two days. So it has kind of remained there, so there are all those pressures and uncertainties regarding the currency as a result of the passing of the Anti-Homosexuality Act,” Atingi-Ego further revealed.

Before the World Bank and Uganda agreed on a solution, the US Department of State issued a business advisory on October 23 2023 encouraging Americans not to invest in Uganda because of rampant corruption and abuse of human rights due to the homosexuality law.

The advisory was jointly issued by U.S. Departments of State, Labor, Health and Human Services, Commerce, and the U.S. Agency for International Development targeting U.S. businesses, individuals, and other U.S. persons, including health services providers, members of academic institutions, and investors informing them of “potential risks if conducting or contemplating conducting business in Uganda.”

“Businesses, organizations, and individuals should be aware of potential financial and reputational risks resulting from endemic corruption, described in more detail in the 2023 Investment Climate Statement, as well as violence against human rights activists, media members, health workers, members of minority groups, LGBTQI+ persons, and political opponents,” a statement from the US government announcing the advisory reads in part.

It adds: “Uganda’s enactment of the Anti-Homosexuality Act (AHA) on May 29, 2023, increases restrictions on human rights, to include restrictions on freedom of expression, peaceful assembly, and exacerbates issues regarding the respect for leases and employment contracts.”