A week after President Museveni signed the Anti-Homosexuality Bill into law; the dire effects of that decision are becoming clear as angry donors begin to withhold aid.
So far, at least Shs 262bn worth of donor aid has been withheld. The World Bank announced last Thursday it had postponed a $90m (Shs 220 billion) loan to Uganda's health system over the law which prescribes tougher punishment for gays.
The World Bank action, experts say, is unusual for an institution that typically avoids getting involved in politics. The loan postponement is the largest financial penalty imposed on Uganda since the law came into force. Norway and Denmark announced earlier that they were withholding aid of $8 million (Shs 22bn) and $9 million (Shs 19.6bn) respectively.
This means that in total, the country has so far lost $107 million in aid, which translates into Shs 262bn. A spokesman for the World Bank told the BBC: "We have postponed the project for further review to ensure that the development objectives would not be adversely affected by the enactment of this new law."
The loan was intended to boost Uganda's health services.
The Danish Trade and Development Minister Mogens Jensen, said: "We cannot distance ourselves too strongly from the law and the signal that the Ugandan government now sends to not only persecuted minority groups, but to the whole world."
While the United States has labelled the law "atrocious", it has not yet officially announced that it will withhold aid. However, the US ambassador to Uganda, Scott DeLisi told the BBC last week that Washington could consider aid cuts. President Museveni told CNN in an interview, after signing the bill into law, that the law was intended "to demonstrate Uganda's independence in the face of Western pressure and provocation."
He added, while commissioning a new flight simulator at the air force headquarters in Entebbe on February 22, that the US should stop interfering in the affairs of Uganda, adding that he would work with non-meddling Russia.
"Russia has worked in Africa since 1917, meaning they have been here for [nearly] 100 years. I want to work with Russia because they don't mix up their politics with other counties' politics," Museveni said.
Health experts and HIV/Aids activists in Uganda warn that the biggest losers will not be the politicians but ordinary people whose access to basic health services will be hampered by the cuts. These will be mainly the more than 400,000 people who are enrolled on anti-retroviral therapy [ARVs], with most funding for the treatment coming from donors.
Dr Stephen Watiti, a senior medical officer at Mildmay hospital, which specializes in treating people with HIV/Aids, said the cuts would significantly affect the delivery of HIV/Aids drugs to the people who need them most.
"Both sides don't want to concede but I think for the sake of the people, government and the donors should engage. Otherwise, you are going to see some people dropping dead," Watiti said.
Another doctor who preferred anonymity said since the decision to sign the law was political, it was unfair for the World Bank to target the health sector. The doctor added that even the gays/lesbians, who the donors want to protect, will be greatly affected because they also benefit from health services.
"For us when someone comes for treatment, we do not mind about their sexual orientation," the doctor said.
Uganda has traditionally been one of the largest recipients of international aid. According to the Overseas Development Institute (ODI), the country received $1.6bn (about Shs 4 trillion) in 2011, making it the world's 20th largest aid recipient - with America one of the key donors.