Ghana’s fight over anti-LGBTQ law threatens $20 billion debt deal

Ghana’s Supreme Court will on Wednesday start hearing a case that has the potential to both threaten the West African country’s $20 billion debt restructuring and test the World Bank’s commitment to support LGBTQ rights.

The court is being asked to strike down legislation that would jail those who identify as LGBTQ and punish others — family members, co-workers, teachers — if they fail to inform on them to the authorities. If the court rejects the appeal, the World Bank will face a dilemma: should it continue to support the anti-poverty fight in Ghana or defend liberal values.

It’s a decision that’s likely to reverberate way beyond Ghana’s borders, setting a precedent for how the Bank handles the erosion of LGBTQ and other human rights globally.

“The World Bank doesn’t want to stop lending because there is such great need,” said Elana Berger, the executive director of the Washington-based Bank Information Center, which works with activists to make development finance more accountable. “It’s trying to walk a fine line between carrying out critical development projects and demonstrating its commitment to non-discrimination.”

Ghana’s normally tight-lipped finance ministry warned in a leaked memo in April that if the government endorses the Human Sexual Rights and Family Values Bill it could jeopardize $3.8 billion of World Bank funding over the next five to six years; potentially derail a $3 billion bailout program from the International Monetary Fund and hurt the country’s efforts to restructure $20 billion of external liabilities.

Uganda approved similar legislation in May 2023. In the following August the World Bank halted new funding to the country, warning that the law “fundamentally contradicts” its values. But the Washington-based lender is acutely aware that it cannot be seen to be interfering in a sovereign country.

It’s also mindful that cutting lending to African countries risks spurring them to borrow more from China, the top geopolitical rival of the US, the World Bank’s biggest shareholder, said Paul Cadario, who spent almost four decades working at the institution before joining the University of Toronto.

In response to questions from Bloomberg News, the World Bank said that it doesn’t comment on bills before they become law, adding that it has a “longstanding and productive relationship with Ghana.”

As recently as 2021, it described the country as a “rising growth star and a beacon of hope for West Africa.” Today however, Ghana is heavily indebted. It stopped making most of its debt repayments more than a year ago. And the future of both its restructuring and key government programs now rely on the continued support of the World Bank and IMF, which said it would wait for the court process to “play out” before making any comment.

The World Bank is monitoring the progress of the legislation and preparing options to respond, according to people familiar with its operations, who asked not to be identified because deliberations are taking place in private. Even if the Supreme Court denies the appeal the law would still need to be ratified by President Nana Akufo-Addo — who will leave office after elections in December — and who has yet to say whether he supports the legislation.

But there is a further complication. Both main contenders for the presidency — Mahamudu Bawumia and John Mahama — have attempted to outdo each other on populist issues. The anti-LGBTQ bill has been no exception.

“In an election year, you have to be very careful,” said Charles Abani, the United Nations Resident Coordinator in Ghana. “The international community fades into the background.”

Despite glimpses of progress in recent years — Gabon, Angola and Botswana have all decriminalized homosexuality — other countries on the continent such as Kenya, Namibia, Tanzania, and Niger are considering introducing legislation that deepens anti-homosexual discrimination.

Rights vs Funding

To borrow from the World Bank, countries must commit to respect “environmental and social standards” that protect communities from harm and exclusion in projects the lender finances. Where there’s a risk of these standards not being met, the borrower has to put in place mitigation measures to prove that authorities are still able to implement the projects in a way that isn’t discriminatory or harmful.

But anti-LGBTQ laws would elevate that risk, according to the World Bank’s anti-discrimination guidelines.

“To what extent can we negotiate the lives of people” said Alex Kofi Donkor, the director of the activist group LGBT+ Rights Ghana. “The only option is for the bill to be struck down.”

Supporters say the legislation — passed in February — is necessary to address gaps in a colonial-era law that already bans gay sex in Ghana, but which has been widely ignored for decades. It hasn’t generated as many international headlines as the measures in Uganda, originally introduced in 2014, which were subsequently revoked after an international clamor including the suspension of a World Bank loan. Uganda’s version grabbed global attention by prescribing the death penalty for “aggravated homosexuality” for certain offenses. Having same-sex relations in Uganda carries a penalty of as much as life in prison, but identifying as homosexual isn’t itself criminal.

“The Ugandan law targets LGBTQ people in such a horrible way,” said Donkor. “But the Ghanaian bill goes even further. Even the family members of LGBTQ persons could go to prison if they don’t report them. That’s why we keep reiterating how extreme this bill is.”

The legislation appears to borrow from Nigeria, which outlawed civil society organizations that support LGBTQ groups in 2014, and from Uganda which drastically increased prison penalties. But it also draws from Russia by criminalizing speech, Hungary by preventing LGBTQ education and Saudi Arabia by targeting content providers which could extend to streaming services like Netflix Inc., said Kristopher Velasco, an assistant professor in the department of sociology at Princeton University.

“Other countries have one piece of the bill,” said Velasco, “Ghana pulls all of them together into one dramatic legislation.”

Sovereignty Struggles

Anti- LGBTQ activists are looking to coordinate efforts across the continent. At Uganda’s Imperial Resort Beach Hotel, overlooking Lake Victoria and a short drive from the country’s main airport in Entebbe, Sarah Opendi, Uganda’s minister of state for mineral development, took the stage last week to welcome parliamentarians from Ghana, Comoros, Zambia, Ethiopia, Kenya and beyond to the second African Inter-Parliamentary Conference on Family Values and Sovereignty.

The gathering emphasized the perceived conflict between international lending standards and family values. And hinted at the possibility of clashes between some governments and lenders.

“For decades, international institutions and donor countries have been providing substantial, much-needed foreign aid to address the multi-faceted needs of our countries,” a promotional note read. “However, along with this support, have often come requirements to implement policies and programs, which directly impact our national sovereignty, African culture, family values, and Africa’s children.”

David Bahati, Uganda’s state minister for trade who introduced the original anti-LGBTQ bill in 2014 told the conference of the danger that “we are going to continue to be bullied, we are going to continue to be manipulated, we are going to continue to be influenced” — a possible reference to Uganda’s treatment after it pushed forward with its legislation last year.

“Poverty is one of the things that weakens our fight in our defense for family values and cultural values,” Bahati told delegates.

Those comments come against a backdrop of sub-Saharan Africa facing an “acute” funding squeeze, according to the IMF. Borrowing costs are high, spurred by the US Federal Reserve’s monetary policy that kept global financing conditions tight. Some of the countries that sold eurobond debt when financing was cheaper are now spending a bigger chunk of their revenues on interest payments.

Ghana went into default in December 2022, and sought a $3 billion bailout from the IMF and additional support from the World Bank. Zambia and Ethiopia also defaulted. Other countries are having to cut spending on healthcare and education to keep up with debt repayments. They are also turning to concessional lenders like the World Bank and IMF to borrow at cheaper rates than those available on the international and domestic capital markets.

Demand for such financing outstrips supply, in theory giving lenders leverage over governments. Rights advocates have successfully encouraged institutions like the World Bank to spell out that sexual orientation and gender identity, or SOGI, is considered a non-discrimination category. That language has caused much unease in some conservative circles, including a growing number in African parliaments.

The World Bank has long had non-discrimination standards covering marginalized groups, but the development of a policy specific to SOGI was created in the wake of Uganda’s 2014 bill, said Fabrice Houdart, who was president of GLOBE, a resource group for LGBTQ employees of the World Bank, at the time. It was the first time the World Bank suspended loans for violating social standards on the basis of discrimination against sexual and gender minorities, he said.

“It seemed more like a capricious move in 2014. There were no proper consultations. Even LGBT groups weren’t consulted,” said Houdart. “The Bank’s stand against Uganda in 2023 was very different,” he said. “It was rooted in policy.”

‘Global Interference’ 

The Entebbe conference showed how organized the opposition to the institutionalization of LGBTQ rights has become, using the argument of national sovereignty.

“The irony is that a lot of anti-LGBTQ policy is tied to global interference,” said Velasco. “Globally, the pro-family movement, which is largely led by the US, has other things they are working on, including issues about women’s health, such as abortion and contraception. They’re against anything that limits procreation,” he added. “They’re very worried about fertility rates.”

The family values movement defines family as a unit created from the union of a man and a woman, and sees broader definitions of family as a threat to population growth, making LGBTQ groups a target of their advocacy work, said critics. Sam George, the main sponsor of the Ghanaian bill, has attended at least two “pro-family” conferences in the US, organized by conservative Christian groups that promote the “natural family” and push an anti-LGBTQ agenda.

The UN’s Abani urges caution however over next steps for both the government in Accra and the international institutions. Sanctions, he says, should be a conversation of “last resort,” because it risks “stoking sentiments in favor of the bill in an election year.”

In Uganda, sanctions were the “real” reason why the 2014 law was repealed, argued Clare Byarugaba, a coordinator at Chapter Four Uganda, a rights advocacy group which has urged the World Bank to maintain its position on the country until the law is repealed.

“We got to a point where we had nothing left to lose and it was the only tool that worked,” she said. “We are sharing the strategies we’ve used over the last 10 years in Uganda with Ghanaian activists.”