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Sweden has suspended some of its financial aid to Uganda over a law
that toughened punishment for gay people, becoming the fourth donor to do so,
its government said in a statement.
Ugandan President Yoweri Museveni signed an anti-gay bill in late
February that strengthens already strict laws against homosexuals by imposing
a life sentence for certain violations and making it a crime to not report
anyone who breaks the law.
"Swedish aid is not unconditional. The Government is therefore
now choosing to suspend government-to-government payments still due under our
current strategy for Uganda, with the exception of research
cooperation," Swedish Minister for International Development Cooperation
Hillevi Engström said .
Sweden follows the World Bank, Norway and Denmark, who have withheld
or diverted aid totalling about $110m. The United States, the biggest
Western donor, says it is reviewing ties.
Sebastian Tham, spokesman for the ministry, said Sweden would
immediately cut planned aid worth 6.5 million kronor ($1m) to the Ugandan government.
Continued donor cuts to east Africa's third biggest economy are
stirring fears of capital flight and are forcing Uganda to look to
alternative sources for funding its budget, for which donors make up 20
percent.
The aid suspensions have rattled the Ugandan shilling, prompting the
central bank to intervene and sell dollar to the market on three occasions
after Museveni signed the law.
The central bank has also said a decline in foreign aid was a source
of uncertainty for the economy, and that it would continue to intervene in the foreign exchange market to stem volatility as it
had sufficient reserves to do so, amounting to about $3bn.
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Source: Reuters
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