The World Bank is delaying a $90 million loan to Uganda because of a Draconian new law that makes gay sex illegal, punishable by up to life in prison.
The Uganda law has received widespread criticism from Western governments as well as the United Nations and rights groups."
The World Bank loan was intended to help the East African nation strengthen its health-care system, but now is in doubt.
"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," a statement from the World Bank said.
Uganda President Yoweri Museveni signed the anti-gay bill on Monday, saying he wanted to deter Western groups from promoting homosexuality in Africa.
Jim Yong Kim, president of the World Bank Group, on Thursday wrote an opinion piece in the Washington Post that slammed the anti-gay laws in Uganda and Nigeria and pointed out that 81 other countries have laws that make homosexuality illegal. He also criticized other forms of discrimination.
“Institutionalized discrimination is bad for people and for societies,” Kim wrote. “Widespread discrimination is also bad for economies. There is clear evidence that when societies enact laws that prevent productive people from fully participating in the workforce, economies suffer.”
Under the law, first-time offenders convicted of having homosexual sex could face 14 years in prison, according to drafts of the bill seen by The Associated Press. The ultimate penalty for repeat offenders would be a life sentence.
The law also makes it a crime to promote gay activity, and to fail to report someone for breaking the new law, again according to drafts. The final bill has not been published.
The bank still has a $1.56 billion portfolio of projects in Uganda, one of the world's poorest countries, according to Reuters.
The loan postponement follows announcements by Norway and Denmark that they would hold back donations to Uganda because of the law.
And President Barack Obama has warned Uganda passage of the would complicate relations with Washington.
The Associated Press and Reuters contributed to this report