World Bank defers $90m loan to Uganda due new anti gay law.

President Museveni signed the controversial bill on Monday 

The World Bank has postponed a $90 million loan to Uganda after the country new anti gay law has drawn harsh criticism from across the globe. The loan was due to support and boost Uganda’s health services.

World Bank officials stated that they would not be willing to donate the money unless they could guarantee that projects that the money was destined to support would not be adversely affected by the new law.         

The new law was passed on Monday and is set to strengthen already strict legislation concerning homosexuals in Uganda. The law states that any person ‘promoting’ homosexuality is deemed a criminal and acts of ‘aggravated homosexuality’ are punishable by life imprisonment. The bill originally proposed the death penalty for some homosexual acts, but that was later removed amid international criticism.

The Ugandan government’s move has drawn harsh criticism from the EU with countries such as Denmark and Norway redirecting aid away from the government.

The US has also condemned the move with US Secretary of State John Kerry calling the law “atrocious”. South African Nobel peace laureate Desmond Tutu has compared the law to the anti-Semitic laws in Nazi Germany or the racial abuse seen in apartheid South Africa.

 World Bank President, Jim Yong Kim warned that the restriction of sexual rights through legislation ‘can hurt a country’s competitiveness by discouraging multinational companies from investing or locating their activities in those nations’.

The loan was due to be accepted on Thursday to support a loan given in 2010 focusing on family planning, maternal health and newborn care.

A spokesman for the World Bank said: ‘We have postponed the project for further review to ensure that the development objectives would not be adversely affected by the enactment of this new law.’

Uganda has already incurred huge financial loss due to the law but the World Bank’s withdrawal is by far the largest financial penalty the country has had to sustain. US President Obama has warned the law could ‘complicate’ Washington’s relations with Uganda, which receives a reported $400m (£240m) in annual aid from the US.

Despite vocal international criticism, Ugandan President Yoweri Museveni pushed forward and signed the anti-gay bill earlier this week.

Government spokesman Ofwono Opondo defended Museveni, stating he wanted ‘to demonstrate Uganda’s independence in the face of Western pressure and provocation’.

Homosexuality is illegal in 38 African countries, where most sodomy laws were introduced during colonialism. In Uganda, homosexual acts were punishable by 14 years to life in prison even before the controversial bill was signed into law.