ECONOMIC BRIEFING
The Impact of the Anti-Homosexuality Act on Uganda’s Economy
Uganda’s Anti-Homosexuality Act (AHA) became law in May 2023. It states that it is an “Act to Prohibit Any Form of Sexual Relations between Persons of the Same Sex; To Prohibit the Promotion or Recognition of Such Relations between Persons of the Same Sex; and for Related Matters (30 May 2023, Act No 6/2023)”.
It is estimated that in the twelve months following the AHA’s passage, Uganda has made an economic loss of between $470 million and $1.6 billion. This comprises 0.9–3.2% of gross domestic product (GDP).
The Anti-Homosexuality Act therefore marks a critical juncture for Uganda which may alter the trajectory of the country’s economy for years to come. Combined losses over a five-year period are estimated to be between $2.3 and $8.3 billion USD.
The evidence is now clear: the Anti-Homosexuality Act makes it harder for Uganda to foster a dynamic and diversified modern economy that is attractive to investors, tourists and skilled workers.
Key areas of economic impact
International Aid. Uganda risks losing $276–$1,024 million USD annually due to halted funding and potential aid cuts – accounting for approximately half of the potential economic burden. The existing standards of international aid organizations underscores the critical need to address the underlying issues of discrimination driving these losses.
Foreign Direct Investment (FDI). The direct cost to the Ugandan economy of reduced Foreign Direct Investment as a result of the AHA is estimated between $48–75 million USD annually, and the long-term indirect economic impact of this may be much higher.
Tourism and National Reputation. Uganda’s tourism sector, a crucial pillar of its economy, could suffer losses of $9–$99 million USD due to the negative international perceptions fostered by the AHA. The damage to Uganda’s global reputation could have lasting consequences, far beyond tourism.
Public Health. The AHA exacerbates public health challenges, particularly in managing HIV and AIDS, with projected losses of $70-$312 million USD annually. The law’s stigmatization of LGBTQ+ individuals hinders access to essential health services, contributing to a worsening public health crisis.
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. The enforcement of the AHA is projected to incur an additional $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.
Human Capital and Talent Flight. The AHA is likely to drive away 5,000–15,000 skilled individuals, resulting in an annual productivity loss of $3–$24 million USD. The loss of human capital, particularly in a developing economy, can have long-term detrimental effects on Uganda’s growth prospects.
Trade Relations. The suspension of Uganda’s AGOA status by the U.S. is expected to result in a loss of approximately $0.5 million USD in future tariff payments, with broader implications for exports. The erosion of trade relations due to discriminatory policies poses a serious threat to Uganda’s economic resilience.