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There is an economic component to the debate over the Anti-Homosexuality Bill sponsored by MP David Bahati which has so far gone untested.  Opposition to the Bill is couched mostly in terms of rights, responsibilities, and laws.  But what about the financial impact to the country when the Bill becomes law?

Research conducted by the BBC this year estimated the number of gay people in Uganda at 500,000.  Human rights groups and gay rights advocates estimate the number to fall between 500,000 and 650,000.  Uganda’s population is approximately 31,000,000 according to the Uganda Bureau of Statistics or about 32,000,000, according to the World Bank.  This means probably 2% of the people in Uganda are gay.

The country’s Gross Domestic Product (GDP) at current prices for 2008/2009 in the Bank of Uganda Summary of GDP was 29.8 trillion shillings or about 14.0 billion dollars using a crude average exchange rate for June 2009.  The World Bank estimates Uganda’s GDP for 2008 at 14.5 billion dollars.  If we use the median 14.25 billion dollars or about 30.4 trillion shillings at that same exchange rate as our starting point then we can quantify the impact of eliminating homosexuality in Uganda.

The sponsors and supporters of the Anti-Homosexuality Bill have variously called for the execution or life imprisonment of gay people, for the curing or reformation of gay men and lesbians and for the eradication of homosexuality from Ugandan society. Since gay is an identity like ethnicity, one can’t get rid of homosexuality without also getting rid of the homosexuals.  The methods by which this is accomplished may be the subject of debate, but in economic terms the extreme of such a policy can only mean the elimination of actual or potential productive capacity from the economy.

In order to gauge properly the economic impact of rounding up or killing or otherwise eliminating gay economic capacity, we would have to know details about their incomes, spending habits and employment. The vicious condemnation of their identity discourages homosexuals from publicly identifying themselves for any purpose, so we don’t really know how much liquid capital, for example, gay people can move or how many tonnes of coffee they produce.  We must therefore rely on crude averages which assume the distribution of people across the map, the population and the economy is homogeneous.  Evidence from every society where we have reliable data on the gay community tells us this isn’t the case. In the United States, for example, gay people make up around 2% of the population according to some estimates, but they spend roughly 650.0 billion dollars or about 5% of US GDP.

Gay people there tend to be of economically productive age, live in cities and towns, have relatively better incomes, education and political awareness and a somewhat lower savings rate – which means they spend more. They command above average influence on the economy.  Although numbers and spending power differ across countries, the qualitative measures which describe the demographics of the gay community are almost the same.  So, on average we should expect gays in Uganda to resemble their counterparts in the US and the EU and Asia in those ways.  Though we lack comparable data about incomes and spending, it is reasonable to assume that the trends are qualitatively and possibly quantitatively similar. This means the analysis below will underestimate the impact of the economic importance of gays and lesbians, bisexuals and transgender people in Uganda.

Other things being equal, two percent of the people account for two percent of the GDP.  That’s roughly 600 billion shillings or about 280 million dollars. What does this buy you in Uganda today? It gets you almost all of the military expenditure of 2.3% of GDP or about 320 million dollars.  It could also absorb over half of the 500 million dollars in remittances the World Bank expects to pass through official channels or the 500 million dollars in foreign direct investment expected to arrive here. That 280 million dollars accounts for one in six dollars of official aid, which itself supports about half the government’s budget.  It also is more than the 236.6 million dollars which the United States spent on the President’s Emergency Plan for AIDS Relief (PEPFAR) in Uganda in 2007, the last year for which data is available.

Would supporters of the Bill stop spending on the UPDF, block remittances and refuse external aid and investment? Would they stop fighting AIDS?  Of course not, though some of the Bill’s supporters blame the AIDS crisis on homosexuals and have called for reductions in funding AIDS and HIV treatment.  If any of these pieces of public spending were to dry up, the economy would feel the effects immediately.  Yet the Bill’s supporters advocate a set of ideas which will have similar effects.

The Anti-Homosexuality Bill as written does not present data or even arguments about its impact should it become law. Instead, it makes statements of unsupported opinion about the nature of homosexuality and the alleged behaviour of gay people. The accusations of criminality directed at the gay community rest on assumptions for which the Bill presents no evidence, and the invective aimed at gay people generally is neither supported nor even explained in the Bill. A discussion of the economic implications of the Bill is ignored, yet even the cursory analysis presented here indicates the effects could be significant. The Bill does not meet the standards of legislation fit for discussion before Parliament, and it should be defeated on its lack of merit even if Members of Parliament will not rise to a moral argument against it.

Members of Parliament, religious leaders and public advocates of the Bill are debating the future of 600,000 people and 600 billion shillings without reference to all the costs and benefits. That they wish to deprive two per cent of the country’s population of property, liberty or life on the basis of prejudice only is morally reprehensible. To do so willfully ignorant of the consequences of their actions is also poor government.

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