World Bank President Delays $90 Million Ugandan Loan Over Anti-Gay Law

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World Bank President Jim Yong Kim delays a $90 million loan to Uganda because of the East African nation’s crackdown on homosexuality and criticized countries for legalizing discrimination against minority groups. 

The loan to strengthen health-care systems in Uganda was postponed after President Yoweri Museveni signed a bill on Feb. 24, 2014 imposing harsher penalties against homosexuals. Ugandan government spokesman Ofwono Opondo said the suspension amounted to “blackmail” by the Washington-based bank and the country would find another lender, according to posts on his Twitter account.

“As always, Uganda government will live within national resource means by prioritizing sectors and possible re-allocation,” Opondo wrote.

The law has caused a backlash against Uganda, a $20 billion economy that exports more coffee than any other African nation. Denmark and Norway have pulled or redirected aid while Sweden said it’s reconsidering its program. Virgin Group Ltd.’s Richard Branson called for a business boycott in an interview with CNN.

Standard & Poor’s cut Uganda’s credit rating one level last month to B, five below investment grade, on concern its budget deficit is swelling and after donors including the World Bank and U.K. suspended support in 2012 because of corruption.

The Ugandan shilling weakened for a fifth day today, the longest losing streak since February 2013.

The currency traded 0.7 percent lower at 2,537 per dollar by 1:15 p.m. in the capital, Kampala, heading for its biggest monthly decline since November 2012.

Genetic Link

“Institutionalized discrimination is bad for people and for societies,” Kim said in an op-ed article in the Washington Post. “Widespread discrimination is also bad for economies. There is clear evidence that when societies enact laws that prevent productive people from fully participating in the workforce, economies suffer.”

Uganda’s law was enacted after Museveni said scientists in the country found no genetic link to being gay. In Nigeria, where gay sex has been illegal since before independence from the U.K. in 1960, President Goodluck Jonathan last month signed a law that imposes a 14-year jail sentence for same-sex couples.

Kim said more than 80 countries have passed laws that make homosexuality illegal.

“Eliminating discrimination is not only the right thing to do, it’s also critical to ensure that we have sustained, balanced and inclusive economic growth in all societies -- whether in developed or developing nations, the North or the South, America or Africa,” Kim wrote.