Post date: Mar 01, 2014 12:29:37 AM
Uganda shrugs off a decision by the World Bank to postpone a 90 million US dollar loan over a law that toughened punishment for gays. The loan postponement follows the announcement by Norway and Denmark that they would hold back donations to Uganda because of the law. Other donors have also threatened to follow suit with United States said it was reviewing ties.
KAMPALA, UGANDA (FEBRUARY 28, 2014) (REUTERS) - Ugandan government officials on Friday (February 28) shrugged off a decision by the World Bank to postpone a 90 million US dollar loan to Uganda's health system over a law that toughened punishment for gays, an unusual move for an institution that typically avoids wading into politics.
Ugandan President Yoweri Museveni signed an anti-gay bill earlier this week that strengthens already strict laws against homosexuals by imposing a life sentence for certain violations and making it a crime to not report anyone who breaks the law.Government spokesman Ofwono Opondo played down the cuts and international criticism, saying Uganda can do without Western aid.
"Aid is not charity, aid is trade, they loan money at interest and therefore they should not behave as if they are doing a favour to Uganda or to Africa when they trade in their money. Since it is a loan, Uganda was going to repay. Uganda can still seek for this loan from other sources perhaps even on better terms," said Opondo.
The World Bank, a poverty-fighting institution based in Washington, usually refrains from getting involved in countries' internal politics or in issues such as gay rights to avoid antagonizing any of its 188 member countries.
On Thursday (February 27), the World Bank said it was postponing the loan toUganda.
World Bank President Jim Yong Kim sent an email to bank staff saying the bank opposes discrimination, and would protect the safety of all employees.
He said passage of the Ugandan law was not an isolated incident, as 83 countries outlaw homosexuality and more than 100 discriminate against women.
The World Bank loan postponement follows the announcement by Norway andDenmark that they would hold back donations to Uganda because of the law.
Other donors have also threatened to follow suit, and the United States said it was reviewing ties.
The United States is the World Bank's biggest member.
Homosexuality is a taboo in almost all African countries and illegal in 37, including in Uganda where it has been a crime since British colonial rule.
The new law exposes the wide gulf between the continent's often culturally conservative administrations and many of the foreign donor states that support them.
In a hard-hitting speech after signing the law, Museveni warned Western nations not to meddle in the east African country's affairs and said he was not afraid of aid being cut.
On the streets of the capital Kampala, the new law is still a hot topic but many residents have been angered by donors slashing their aid.
"As Ugandans we have our laws and African culture that govern us, every country has got its own law. We can not lean on donors because we want funds and aid from them and we abuse our own culture," said Habib Mukasa, a Kampala resident.
Diplomats and rights groups had pushed Museveni - already under fire from key Western donors over alleged rampant graft and for stifling opposition groups and media - to block the legislation.
Museveni on his part had said last week that he was putting the bill on hold to give scientists a chance to prove that homosexuality could be triggered by genes and was not a "lifestyle choice". They found no such evidence, Museveni said.
"We are saying no and if the president has signed it I welcome it because after all what are the values that we derive from it? Absolutely nothing. They want us to walking naked because they are giving us aid? it is absolute trash," said Paul Mwite, a Kampala resident.
The World Bank's executive board had been set to approve the Ugandan health project on Thursday and the money was meant to supplement a 2010 health loan that focused on maternal health, newborn care and family planning.
The bank still has a $1.56 billion portfolio of projects in Uganda, which it ranks as one of the world's poorest countries.
With a per capita income of $506, Uganda relies heavily on donor aid and suspension of aid could affect many development programmes.
Western anger over the anti-homosexuality law has triggered a sharp fall inUganda's shilling currency, leading the central bank to intervene for two days in a row.
Stephen Kaboyo, an economic analyst in Kampala, said aid is a vital source of hard currency in Uganda and any slowdown on flow squeezes the market. But he played down the impact in the short term.
"In the very short term yes there is this shock, everybody is panicking because markets have not calmed down for people to make a useful or meaningful assessment and know the full impact," said Kaboyo.
Kaboyo also said the Uganda currency which has been declining since the bill was signed could recover with time but the only risk could be if international investors started withdrawing their portfolios.
"We could see easily portfolio flows or reversal of portfolio flows where international investors are taking their money back. That could hurt the shilling in the very short run but all said and done, once a proper assessment is done and the markets shrug of these sentiments we should see the shillings stabilize," said Kaboyo
Gay and lesbian organisations fear the bill will encourage other governments to strengthen penalties, increase harassment, discourage people from taking HIV tests and make it impossible to live an openly gay life.