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Uganda To Turn To China For Lending As World Bank Stops Funding

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As a result of the World Bank’s decision to halt all new lending to Uganda due to a new anti-homosexuality law, Uganda is gearing up to borrow $150 million from China’s Export Import Bank (Exim) to help expand its internet infrastructure.

The ministry of finance wrote that a junior finance minister and the minister of information asked lawmakers on Monday to authorise the debt. The money will be used, it wrote, “to finance the supply, installation, commissioning and support of the national data transmission backbone infrastructure.”

The action highlights East Africa’s growing reliance on Chinese lenders for credit following the World Bank’s decision earlier this year to stop all new lending to Uganda due to a new anti-homosexuality law.

Uganda is negotiating a loan to finance the construction of a pipeline to help export its crude oil to foreign markets with the Chinese export credit agency SINOSURE and Exim Bank.

Lending to Uganda was suspended by the World Bank, which had previously been the country’s largest development partner, following President Yoweri Museveni’s signing of the Anti-Homosexuality Act, which imposes severe penalties, including death, for a variety of homosexual offences.

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