Inside Uganda’s talks with the World Bank

Uganda is scrambling to address issues that it chose to ignore during World Bank review missions as it seeks funding to accelerate its development agenda, Saturday Monitor can reveal.

The country, which reviews World Bank missions on a regular basis, has long fallen short on sustainable development goals, prompting the lender to stretch no further when it enacted what the global north has classed a harsh anti-gay law. The international lender is now infrequently being contacted by Kampala to reconsider its decision to halt financing new projects.

“The government has complied with issues relating to inflation, fiscal policy, and monetary policy on a number of occasions,” a source close to the World Bank told the Saturday Monitor on condition of anonymity, adding, “Frequently, the government has failed to provide value for money and quality service.”

The World Bank considers the Uganda government’s disregard for human rights and freedoms to be the segregation and marginalisation of minorities.

Uganda is now pushing for agreements that have been made, before agreeing to move forward until a consensus is reached with the World Bank.

Red flag

In a statement on May 31, the World Bank expressed grave concern about Uganda’s enactment of the Anti-Homosexuality Act 2023, noting that if implemented, the Act would endanger people by creating an additional barrier to vital medical care, disease screening, and precautions.

“The Act is not consistent with the values of non-discrimination and inclusion that the institution upholds. To achieve its goals of ending extreme poverty and boosting shared prosperity, the World Bank Group places inclusive development at the forefront with a focus on all groups, especially those that are marginalised, disadvantaged or vulnerable,” it noted.

Uganda passed the anti-LGBTQ law that includes the death penalty for “aggravated homosexuality”, defined as having same-sex with an HIV-positive victim.

Since then, the government has demonstrated how it can eliminate this financing by strengthening domestic trade and eliminating poverty in its fiscal operations, which economic advocates have refuted. President Museveni even referred to the World Bank’s decision as a “provocation and arrogance” intended to intimidate the country.

Meeting of minds?

Meanwhile, the Treasury says an agreement has been reached through its formal meetings with the foreign lender.

“We have so far understood each other, and I want to assure the country that negotiations are going on well,” Finance Minister Matia Kasaija told Saturday Monitor in an interview.

However, sources from the Uganda Chapter of the World Bank and the International Monetary Fund’s Parliamentary Network dispute these assertions, stating that nothing has been agreed upon.

Reputable sources have told Saturday Monitor that the World Bank is unwavering in its demands and will not only accept Uganda’s neediness. They also revealed that the lender will also guarantee that the country complies with issues it has long avoided such as accountability for the money it has borrowed, corruption, and human rights.

Give and take

Mr Geoffrey Ekanya, the chairman of the Parliamentary Network on the World Bank and IMF Uganda Chapter, stated that the only agreement and commitment made was for more discussions to take place until an agreement is reached.

“Funds will be released based on performance indicators for all financing agreements that the government of Uganda signed. Future financing tranches must take into account timely service delivery, timely report submission, and addressing human rights concerns,” he noted.

‘Better the devil you know’

Ugandan economists emphasise that without the World Bank’s low-cost financing, which has a long maturity and extremely low or zero interest rates, Uganda cannot fulfil its financial obligations.

At one point, the country found itself in a situation where its president was unhappy with the government’s need for penalties for homosexual identification instead of penalising one caught in action in same-sex affairs, in the same time where the World Bank was unhappy with segregation.

“There was already a clear line that both the Ugandan government and the World Bank actually had issues with the law that needed to be addressed,” Dr Fred Muhumuza, a Ugandan development economist, noted

“The negotiations must now include safeguard measures because the World Bank needs to be convinced that there are enough safeguards to ensure support to Uganda does not exclude anyone for any reason,” he added.

Sources at the Treasury told this publication that the government is now eager to engage in discussions with major banks to secure syndicated loans, which might even lead to the issuance of Eurobonds.

Management of cases

Uganda has only recently come to the realisation that some police officers prefer to handle homosexuality and aggravated homosexuality cases without internalising some crucial parts of the Act, which results in unfair convictions.

In an August 25 notice to all country prosecutors, the Director of Public Prosecutions identified that the Anti-Homosexuality Act (AHA) is being mismanaged. Ms Jane Frances Abodo cautioned the public that the AHA only criminalises offences where a sexual act has been performed, rather than mere identification.

“For the avoidance of doubt, a person who is accused or suspected of being gay but has not had sex with someone else of the same sex does not commit the crime of homosexuality,” the notice detailed.

Ms Abodo advised officers to be cautious when reviewing files containing AHA offences.

“You are hereby directed to ensure all files containing charges preferred under the AHA are submitted to headquarters with a written legal opinion for further guidance before a decision to charge is made,” Ms Abodo said.

Background

The World Bank has 189 shareholders after more than 75 years of operation, and it funds development projects for member countries with annual per capita incomes of less than $12,535.

The World Bank estimated Uganda’s per capita income at around $850 in 2022, making it suitable for lending. In May, the lender communicated its decision to hold back on new funding to Uganda on account of enactment of an anti-gay law. State actors expressed their dismay at the bank’s decision to break its own agreements not to base its decisions on political grounds of its member countries.