ANTI-GAY LAW COSTS UGANDA UP TO $1.6 BILLION IN JUST TWELVE MONTHS, SAYS NEW RESEARCH

– Uganda’s Anti-Homosexuality Act (AHA) estimated to have cost the country between $470 million and $1.6 billion USD since being introduced in May 2023.
– The losses – which equate to 0.9-3.2% of GDP – include Foreign Direct Investment (FDI), international aid, trade and tourism, as well as impacts on public health and productivity.
– Combined losses over a five-year period are projected between $2.3 and $8.3 billion USD.

Uganda’s Anti-Homosexuality Act (AHA) has cost the country up to $1.6 billion USD in the twelve months following its introduction in May 2023, according to a new report from Open for Business.

The report projects a five-year loss of between $2.3 billion and $8.3 billion (USD), comprised of several economic indicators including:

– Foreign Direct Investment (FDI). The estimated direct cost of reduced FDI due to the AHA is between $40-75 million USD per annum, though the indirect economic impact could be much higher.
– International Aid. Projected annual losses of between $276 million and over $1 billion USD due to halted funding and potential aid cut. The AHA has significantly strained Uganda’s international relations, including donors like the World Bank suspending funding.

– Public Health. The AHA exacerbates public health challenges, particularly in relation to HIV and AIDS, projecting annual losses of between $70 million and $312 million USD. Access to antiretroviral therapy (ART) has become more challenging due to stockouts and the reluctance of healthcare workers to treat LGBTQ+ patients due to fear of legal repercussions. Increased stigmatization of LGBTQ+ Ugandans is also linked to the marked increase in rates of depression.

– Tourism and National Reputation. This crucial pillar of the Ugandan economy could lose between $9 million and $99 million USD due to the negative international perceptions fostered by its AHA. Any impact on tourism also has an indirect impact on related industries like hospitality, transportation and retail. Furthermore, the AHA has drawn international condemnation and led to strains on relationships with key international partners.

– Trade Relations. The suspension of Uganda’s eligibility for trade preferences under agreements like the African Growth and Opportunity Act (AGOA) represents a potential loss of $0.5 million USD in future tariff payments.
Human Capital and Talent Flight. An estimated 5,000-15,000 LGBTQ+ people will flee Uganda, totalling a productivity loss of between $3 million and $24 million USD. In 2023, almost half (49 per cent) of Ugandans seeking asylum in the UK cited an LGB element in their claims. As the global economy becomes more interconnected and competitive, countries that fail to embrace diversity and inclusivity are likely to fall behind.

– National Productivity. Increased stigma and legal repercussions for LGBTQ+ individuals could lead to a productivity loss of $23-$58 million USD annually. Discrimination not only harms individuals but also hampers overall economic performance, diminishing the country’s growth potential.

– Policing and Legal Costs. Enforcement of the AHA is projected to incur $0.3-$0.5 million USD annually in over-policing and legal costs. These costs represent an unnecessary drain on national resources, which could be better invested in inclusive and equitable development initiatives.

As these factors are exacerbated, it can only be expected that the economic landscape post-AHA will deteriorate further. It is therefore reasonable to expect one of the three future scenarios to occur:

– Positive Scenario: Uganda amends or repeals the AHA, restoring some degree of international confidence. This could result in partial recovery of foreign direct investment and aid, along with stabilization of tourism and trade relations. Economic losses might be contained within the lower range of $470 million USD annually, with a GDP impact closer to 0.9%.

– Negative Scenario: Uganda continues to enforce the AHA without addressing international concerns, leading to severe economic isolation. In this scenario, FDI and aid could decline sharply, tourism might collapse, and trade sanctions could be imposed by key partners. Economic losses could approach the upper estimate of $1,663 million USD annually, with GDP impacts surpassing 3.2%.

– Likely Scenario: Based on current trends and global response, Uganda will face sustained economic losses in the mid-range of our projections, around $1 billion USD annually. This scenario assumes some continued international engagement but with significantly reduced economic support and ongoing reputational damage. The GDP impact in this scenario would likely hover around 2-2.5%.

A spokesperson for Open for Business said: “The evidence is now clear: the Anti-Homosexuality Act makes it harder for Uganda to foster a dynamic and diversified modern economy that attracts investors, tourists and skilled workers.
“Furthermore, not only has Uganda already made significant losses due to the introduction of this law, but these can only be expected to exacerbated further should the AHA remain in law without any amends or steps toward repeal. These are the steps Ugandan policy-makers should be considering in order to future proof their economy while creating a more liveable country for all citizens, not just those who are LGBTQ+.”

About Open for Business
Open for Business (OFB) is a coalition of leading global organizations dedicated to promoting LGBTQ+ inclusion as a core component of sustainable economic growth. OFB operates under the mandate that inclusive, diverse societies are better for business and thus for economic prosperity.
Through collaboration with businesses, policymakers, and civil society organizations, Open for Business advocates for policies and practices that create a more inclusive environment, particularly in regions where LGBTQ+ rights are under threat. Our work is grounded in the belief that robust economic cases can be powerful drivers of change in the quest for equal rights and opportunities for all.

About the Anti Homosexuality Act (2023)
The AHA stands as one of the most severe legislative measures targeting the LGBTQ+ community globally. The law imposes stringent penalties, including life imprisonment and the death penalty for so-called “aggravated homosexuality.”
The AHA criminalizes activities that could be considered promotion, encouragement and communication of homosexuality and information related to it. These criminal restrictions apply to all Ugandans, and many of them apply to corporations and businesses. Discussing or implementing business policies related to LGBTQ+ employees and applicants, consumers, and supply chain providers are among those activities that are criminalized.
This regressive legislation has drawn widespread condemnation from human rights organizations and the international community, highlighting its profound implications for fundamental human rights and freedoms.

Full report here; https://open-for-business.org/uganda