Following the recent Annual International Investment Climate Statement by the United States (US) Department of State, Uganda is accused of creating risks to foreign investment by blocking democracy, protectionism from some senior policymakers, and poor investment in education and health sectors.

The US has also accused Uganda of rising public debt corruption in the government entities among others, which all breed risks for local and foreign investors.

“The closing of political and democratic space, poor economic management, endemic corruption, growing sovereign debt, weak rule of law, growing calls for protectionism from some senior policymakers, and the government’s failure to invest adequately in the health and education sectors all create risks for investors,” the US statement read in part.

According to the statement, the US firms often find themselves competing with third-country firms that cut costs and win contracts by disregarding environmental regulations and labor rights, dodging taxes, and bribing officials.

The US revealed that shortages of skilled labor, a complicated land tenure system, and increased local content requirements also impede the growth of businesses and serve as disincentives to investment.

The US was also concerned with the Anti-homosexuality law that was signed by President Museveni, which according to the statement does not promote more inclusive, transparent, and representative governance.

“Parliament recently passed the Anti-Homosexuality Act of 2023, which President Museveni signed into law to further criminalize LGBTQI+ individuals. Many of Uganda’s youth, a demographic that comprises 77% of the population, openly cry for change. However, President Museveni has not provided any indication that he or his government is planning reforms to promote more inclusive, transparent, and representative governance,” the statement read in part.

The statement indicated that, President Museveni and government officials vocally welcome foreign investment in Uganda but the government’s actions do not always align with its rhetoric.

This has come a day after the World Bank based in Washington DC informed the world including Uganda that it will not again accept Uganda’s loan proposals over alleged violation of LGBTQ Human rights. However, President Museveni responded to the World Bank stating that, with or without loans, Uganda will develop.