Anti-gay laws: Global business giants warn Uganda of blackmail risk

President Yoweri Museveni of Uganda. Photo: Getty Images

Ugandan legislation that sets harsher penalties for violating laws outlawing homosexuality opens companies and workers in the East African nation to the risk of blackmail. 

A bill awaiting assent by President Yoweri Museveni, an LGBTQ critic, will force companies to report homosexual people to the authorities. That’s “unacceptable” and leaves firms vulnerable to “blackmail if accused of breaking any of the laws,” Open for Business, an alliance of global companies including JPMorgan Chase, Meta  and Deutsche Bank, said in a letter to Museveni dated Tuesday. 

The bill, which includes death and life-imprisonment sentences in certain cases, may prompt overseas firms to pause their investments. Uganda is seeking funds for developing oil fields — with partners TotalEnergies and Cnooc — and build a $4 billion (R71 billion) pipeline. The landlocked nation will also need investors as it constructs a railroad and a proposed nuclear power plant.

“A decision to go ahead with this bill will make it very difficult for global companies to do business in the way they know, and in line with best practice,” Jon Miller, chair of Open for Business, said in an interview. “It will almost certainly influence and play into decision-making when it comes to investing in Uganda.”

The projects are crucial for Uganda’s economy, which the International Monetary Fund forecasts will expand 5.9% this year. The oil fields and the pipeline may generate about $70 billion of revenue for the nation during their life.

Research conducted by Open for Business, which advocates for LGBTQ people, showed that discrimination against the community cost neighbouring Kenya’s economy $4.2 billion. It also cost India 1.7% of its $3.2 trillion economy, according to the research. 

“Respect for each other is a cardinal core value for TotalEnergies and non-discrimination of any kind is a founding principle of human rights,” the French energy firm said in an emailed response. “That is why TotalEnergies has reminded the Ugandan authorities of its values through its CEO to President Museveni.”

Standard Bank, Africa’s biggest lender by assets, said the issue was an important one and it plans to “apply our minds in a considered manner over a period of time”.

Muhoozi Kainerugaba, Museveni’s son, tweeted that Uganda could do without foreign investors.

In 2013, Uganda’s parliament passed a bill that carried a life sentence for “aggravated homosexuality.” The law was endorsed by Museveni despite international condemnation by people including then-US President Barack Obama. 

The nation’s Constitutional Court in August that year annulled the law, citing flaws in the legislation process. Lawmakers pledged to reintroduce the bill after the court order. Nine years later, Uganda’s parliament passed the 2023 Anti-Homosexuality Bill on March 21. 

“Museveni must urgently veto this appalling legislation,” Tigere Chagutah, regional director at Amnesty International, said in a statement on March 22. “This deeply repressive legislation will institutionalise discrimination, hatred, and prejudice against LGBTQI people.”