The World Bank has officially resumed funding to Uganda, ending a nearly two-year suspension that began in 2023.
The decision marks a major turning point for Uganda’s economic outlook and development plans.
After a period of strained relations following the enactment of the Anti-Homosexuality Act, the return of World Bank support is set to unlock significant financial resources for infrastructure, education, and social programmes.
For Uganda, this development could not have come at a better time, as the country moves closer to oil production and continues to recover from pandemic-related economic challenges.
With resumed funding, Uganda is poised to strengthen key sectors, rebuild development momentum, and regain the confidence of other international partners.
The return of the World Bank, one of Uganda’s largest development financiers, sends a powerful signal to investors, policymakers, and citizens alike.
Why the World Bank suspended support
In August 2023, the World Bank suspended all new public financing to Uganda in response to the country’s passage of the Anti-Homosexuality Act.
The law, widely criticised by international organisations, introduced some of the harshest penalties against LGBTQ+ individuals in the world.
The World Bank argued that the legislation violated the institution’s core values of inclusion and non-discrimination.
Although the suspension did not affect ongoing projects, it created uncertainty for planned initiatives and significantly disrupted Uganda’s development planning.
Ministries and agencies were forced to put several project proposals on hold, while others sought alternative funding.
The freeze also strained relations between Uganda and other donors, several of whom followed the World Bank’s lead by suspending or reconsidering aid.
Why the World Bank Resumed Funding to Uganda
The resumption of World Bank support came after months of behind-the-scenes diplomacy between the Ugandan government and senior officials at the Bank.
According to the Bank’s June 2025 statement, the decision was made following an agreement on new safeguards and project-level oversight mechanisms designed to prevent discrimination and uphold human rights during implementation.
While the exact details remain confidential, sources familiar with the negotiations say Uganda agreed to enhance transparency and social accountability in how future World Bank-funded projects will be executed.
The Bank reaffirmed that all operations will continue to comply with its Environmental and Social Framework, with special attention paid to inclusion, grievance redress, and protection of vulnerable groups.
The move reflects a delicate balance between upholding development goals and promoting human rights. It also demonstrates the importance of continuous dialogue in international development, even when political and social values diverge.
Impact of World Bank Funds on Key Sectors
Several sectors are expected to benefit from the renewed financial inflows. One of the most affected areas during the suspension was education.
With Uganda’s growing school-age population, the need for more classrooms, trained teachers, and learning materials has become urgent.
The Ministry of Education is already preparing to revive funding proposals that had stalled, including those aligned with the Global Partnership for Education.
Another crucial area is refugee support. Uganda hosts over 1.5 million refugees, primarily from South Sudan, the Democratic Republic of Congo, and other conflict-affected neighbours.
The country’s inclusive refugee policies have been praised globally, but implementation has relied heavily on donor support, including World Bank funding.
The resumed partnership is expected to breathe new life into refugee health, education, and livelihood projects in high-burden districts.
Climate resilience and infrastructure development are also set to gain. Uganda faces increasing risks from climate-related disasters, including floods, droughts, and soil erosion.
The World Bank is expected to support climate-smart agriculture initiatives, sustainable energy solutions, and urban planning projects.
Similarly, road rehabilitation, rural electrification, and digital connectivity programs that had been delayed could now move forward under existing World Bank frameworks.
Macroeconomic Outlook
Beyond sector-specific benefits, the resumption of World Bank funding has broad implications for Uganda’s macroeconomic stability.
Analysts see this as a vote of confidence in Uganda’s governance and economic management. In recent months, the Ugandan shilling has remained relatively stable, but investors have been cautious due to the lack of multilateral support. With the World Bank back on board, investor sentiment is likely to improve.
The timing is also important as Uganda prepares to present its 2025/26 national budget. The country is dealing with a high public debt burden, which currently exceeds 53 percent of GDP.
New concessional loans and grants from the World Bank will provide the government with breathing space and reduce pressure on domestic borrowing. This could, in turn, help lower interest rates and stimulate private sector growth.
The return of funding is expected to open doors to additional support from other development partners.
Institutions like the African Development Bank often align their funding strategies with the World Bank. Uganda could therefore see a renewed wave of development financing in the coming months.
Opportunities and Challenges
The road ahead will not be without challenges. Trust between the World Bank and Uganda must continue to be rebuilt, and both sides will need to ensure that agreed safeguards are implemented effectively.
Delays in project execution and capacity gaps within implementing agencies remain common bottlenecks in Uganda’s public sector.
Nevertheless, the resumption of World Bank support opens a window of opportunity for Uganda to re-engage fully with global development networks.
With large-scale infrastructure plans, such as the East African Crude Oil Pipeline and various industrial parks on the horizon, the country stands to benefit from fresh financing, technical expertise, and private sector linkages.
For ordinary Ugandans, especially those in underserved districts, the biggest hope is that resumed support will translate into better schools, improved health care, safer roads, and more job opportunities.
A New Chapter for Uganda and the World Bank
The World Bank’s decision to resume funding to Uganda is more than just a financial shift it is a diplomatic and developmental reset.
It underscores the importance of engagement, even in the face of deep disagreements, and highlights the role that multilateral institutions play in supporting inclusive growth.
As Uganda enters a new chapter in its development journey, the coming months will be critical in demonstrating that international support can be both principled and practical.
With the right commitment from all sides, the resumed partnership has the potential to deliver long-term impact and meaningful change for millions of Ugandans.
