Borg Sees Obstacles to Swedish Investment in Uganda Over Gay Law

Sweden’s government faces a “major problem” dealing directly with the Ugandan government after the East African nation enacted a law that imposes tougher penalties on gays.

Sweden is reviewing its aid to the country after Ugandan President Yoweri Museveni signed the Anti-Homosexuality Bill on Feb. 24, Finance Minister Anders Borg said in an interview yesterday in the Rwandan capital, Kigali. Museveni said he enacted the legislation because scientists in Uganda found no genetic link to homosexuality.

The law “is going to cause a major issue between Uganda and the investors in Sweden that produce in or trade with the country,” Borg said. “Uganda is creating an obstacle for themselves.”

Uganda is Africa’s biggest coffee exporter with a $20 billion economy that is the third-largest in East Africa. Swedish companies including Ericsson AB (ERICB), the world’s largest maker of wireless networks, Scania AB (SCVB), the truckmaker controlled by Volkswagen AG, and Oriflame Cosmetics SA (ORI) have investments in Uganda, according to the Swedish Embassy in Kampala, Uganda’s capital.

Norway’s government said it plans to withhold aid to Uganda, while Denmark plans to redirect its Ugandan government assistance to private industries. Uganda relies on donor support to fund about 20 percent of its budget, according to the government.

“Sweden is engaged in very many programs in different sectors” in Uganda, Borg said. “We will review all of them.”

Borg, who visited Uganda earlier this week, arrived in Kenya today on the third leg of his trip to East Africa that also included a visit to Rwanda yesterday.

To contact the reporter on this story: Saul Butera in Kigali via Nairobi at sbutera2@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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