Wayne Lumbasi
The World Bank has restored its funding to Uganda with a massive $2 billion development boost, marking a turning point for the country after more than a year of financial isolation. The funds, to be disbursed over the next three years, signal renewed trust between the World Bank and Uganda following the suspension of support in 2023 over the country’s controversial anti-LGBTQ law.
The decision to resume lending opens the door for Uganda to access affordable credit, ease pressure on its domestic borrowing, and reignite stalled development projects across key sectors.
According to Uganda’s Ministry of Finance, the funding will focus on infrastructure, energy, agriculture, ICT, and regional connectivity, areas considered vital for long-term growth and job creation. The World Bank’s involvement is expected to stimulate economic productivity, modernize public services, and enhance trade links within East Africa. This comes as Uganda prepares to begin crude oil production by mid-2026, an event that could reshape its economy and elevate its regional influence. With new financing, the government aims to align its infrastructure and industrial base with the anticipated oil-driven boom.
The World Bank’s relationship with Uganda has been complicated by the country’s stance on LGBTQ rights. In 2023, the Bank halted all new funding after Uganda passed one of the world’s harshest anti-LGBTQ laws, sparking global condemnation. The legislation, which introduced severe penalties for same-sex relations, was widely criticized as a violation of human rights. The Bank stated that it could not continue business as usual under such circumstances and pledged to conduct a review of its projects to ensure inclusion and non-discrimination. Its decision to resume funding in 2025 follows reported discussions with Ugandan authorities on strengthening social safeguards and ensuring that World Bank-financed projects do not contribute to discrimination.
The reinstatement of World Bank support is also expected to reduce Uganda’s reliance on costly domestic borrowing, which has strained the national budget. Concessional loans from the Bank carry lower interest rates, offering the government much-needed fiscal breathing space. However, experts note that the return of funding comes with expectations, particularly on governance, transparency, and adherence to social and environmental safeguards. The Bank will be watching closely to ensure funds are used effectively and reforms are implemented.
While the move has been welcomed by Uganda’s government, human rights groups have expressed concern that resuming aid without visible legal reforms could weaken global pressure on human rights compliance. Still, for Uganda’s economy, the $2 billion injection is a timely lifeline. It not only revives critical development projects but also signals confidence from international lenders at a crucial time. The real test now lies in how Uganda manages this renewed opportunity and whether it becomes a foundation for inclusive growth or a missed chance in its quest for sustainable development.
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