Swedish Finance Minister: Uganda Faces 'Unfortunate Economic Risks' Over Anti-Gay Law

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In short
Anders Borg the Swedish Finance Minister told a media briefing at the Swedish Embassy in Kampala that by signing the act, Uganda did not only risk losing its aid, but also its reputation as an investment destination.

The much expected fall-out between the Uganda government and donor countries continues to gather pace after President Museveni signed the Anti-Homosexual Act. Sweden is the latest country to say that it is going to review its aid to Uganda for both the government and NGO’s.

Anders Borg, the Swedish Finance Minister told a media briefing on Tuesday at the Swedish Embassy in Kampala that by signing the act, Uganda did not only risk losing its aid, but also its reputation as an investment destination.

//Cue in: To my mind…
Cue out: …a major factor//

Borg said he had met Prime Minister, Amama Mbabazi, Finance Minister, Maria Kiwanuka and Prof. Emmanuel Tumusiime-Mutebile, the Governor Bank of Uganda to discuss the consequences of the signing the bill into law to the Ugandan economy. The NORDIC countries, Denmark, Sweden and Norway have always been critical of Uganda signing anti-Homosexuality law as going against human rights.  

President Museveni signed the Anti-Homosexuality Act on Monday afternoon while the entire local and international press was present, an unprecedented move.  Norway and Denmark have indicated that aid to Uganda will be channeled from budget support to NGO’s. Sweden on the other hand, like the United States of America is reviewing all aid to Uganda, including government-to-government and NGO’s. Borg said there is political pressure in Sweden that aid to Uganda be evaluated.

//Cue in: The whole aid…
Cue out: ...evaluate the government to government aid//

In the last financial year, Uganda received 35million Dollars from the Swedish Government, of which 10.7 million Dollars goes to budget support. Borg noted the Swedish government was planning to on broader investment in East Africa, mostly in healthcare and supporting the private sector. He however said the “events in Uganda are overshadowing the more optimistic African view.”

President Museveni while signing the bill warned of this “western interference” regarding it as “social imperialism” on a sovereign country. Sweden was one of the first countries to suspend aid to Uganda at the height of the corruption scandals in the Office of Prime Minister (OPM) where most of the government aid was funneled. This was part of the reason why budget support shrunk in 2013/14.

Urban Anderson, the Swedish Ambassador to Uganda says that they’ve been having discussions with the Ministry of finance and that the reforms to tackle financial leakages were “steps in the right direction.” This latest fallout however only serves to provide yet another potential aid cut from western countries.