In­vestors look be­yond anti-gay law and stick with Uganda

Daily Trust - - BUSINESS NEWS -

Fuzzy guide­lines on eth­i­cal in­vest­ing and donors’ timid re­sponse to Uganda’s new anti-gay law have re­as­sured fund man­agers and pri­vate eq­uity firms about con­tin­u­ing to in­vest in the newly oil-rich coun­try, de­spite world­wide crit­i­cism.

Busi­ness leader Richard Bran­son was among those to ob­ject when the east African coun­try signed leg­is­la­tion this year which strength­ened pun­ish­ments for any­one caught hav­ing gay sex, im­pos­ing jail terms of up to life for “ag­gra­vated ho­mo­sex­u­al­ity” - in­clud­ing sex with a mi­nor or while HIV-pos­i­tive. It also crim­i­nalised les­bian­ism for the first time.

The law - slightly wa­tered down from orig­i­nal plans a few years ago that in­cluded the death penalty for those con­sid­ered worst of­fend­ers - drew crit­i­cism from western gov­ern­ments too.

The White House said it was re­view­ing its re­la­tion­ship with Uganda’s govern­ment.

Bran­son, the bil­lion­aire founder of the Vir­gin Group con­glom­er­ate, said he had been se­ri­ously con­sid­er­ing in­vest­ing in Uganda but would not now do so. (here)

“I find the im­po­si­tion of the new anti-gay laws in Uganda very sad and dam­ag­ing to the coun­try’s rep­u­ta­tion and prospects,” Bran­son said on Tues­day in e-mailed com­ments to Reuters.

“The new laws will put people off and we will not be set­ting up new busi­ness in Uganda while they ex­ist.”

But so far, the new law has re­sulted in the re­di­rect­ion of just $118 mil­lion or so in aid, un­likely to make a big dent in the coun­try’s budget. And guide­lines on so­cially re­spon­si­ble in­vest­ing do not nec­es­sar­ily cover dis­crim­i­na­tion by sex­u­al­ity.

Zain Latif, founder of in­vest­ment hold­ing com­pany TLG Cap­i­tal, which in­vests in fron­tier mar­ket com­pa­nies, has two on­go­ing projects in Uganda.

“There has been a lot more talk than ac­tion,” Latif said, point­ing to a rel­a­tively muted re­ac­tion to the law in Uganda’s ex­change rate.

“With Africa you have a lot of noise - if you fo­cus on why we are in­vest­ing in Africa, that has not re­ally changed.”

The at­trac­tions of Uganda in­clude a likely 7 per­cent growth path, ac­cord­ing to the World Bank, and as with many other fron­tier mar­kets, a young and grow­ing pop­u­la­tion, ris­ing mid­dle class and con­sumer de­mand and high re­turns on do­mes­tic debt.

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