The Minister of State for Finance (General Duties), Henry Musasizi, has urged Ugandans not to worry about losing the government’s biggest lender, the World Bank, saying ongoing negotiations are pointing to positive results for Uganda.
Musasizi revealed to Parliament’s Committee on National Economy that the government is working tirelessly to address the issues being raised by the World Bank during rounds of negotiations.
The minister was responding to Kimanya-Kabonera Division (Masaka City) legislator Abed Bwanika, who asked for an update on the progress of negotiations between the government and the World Bank.
The Minister said that the two sides are engaged in heavy negotiations regarding the bank’s decision to halt funding to Uganda as a consequence of the passing of the Anti-Homosexuality Act 2023.
We are involved in heavy negotiations with the World Bank, and we have made significant progress. There are a number of benchmarks they have given us to do, and there is information they have asked us to provide and also evidence that certain things they were querying will be addressed, said Musasizi.
Musasizi added,
We have continuously provided all the information and addressed all the issues that they keep raising and we are optimistic that we shall reach a position between us and the World Bank which is very positive, so there shouldn’t be any reason to worry about the decision World Bank took.
In August 2023, the World Bank announced it was cutting funding for new projects in Uganda on the grounds that the controversial legislation fundamentally contradicts the Bank’s values. The Bank’s view was that the Anti-Homosexuality Act, which provides for tough penalties for convicted offenders, undermines its vision of eradicating poverty on a liveable planet; no one should be excluded on the grounds of race, gender, or sexuality.
Since the decision was affecting new projects, the bank continues to deal with Uganda on the funding that had been approved by the time the controversial law was enacted. A case in point is that Finance Minister Matia Kasaija recently tabled a motion seeking Parliamentary approval to borrow up to US$325 million (UGX1.223 trillion) and receive a grant of up to US$25 million (UGX93.601Bn) from the World Bank Group to finance the Uganda Climate Smart Agricultural Transformation Project (UCSATP).
Also, days after the World Bank announced its decision against Uganda, Parliament approved a loan worth US$518 million (UGX1.925 trillion) and a grant of US$48 million (UGX178.497Bn) from the World Bank Group to finance the Greater Kampala Metropolitan Area Urban Development Program.
It isn’t known what impact the decision by the World Bank to rescind its decision on Uganda will have on the national economy, given that recently, the Bank of Uganda revealed that the earlier pronouncement by the international lender saw the Uganda Shilling lose value within two days, and the currency hasn’t returned to its glorious days since then.
