Sovereignty Bill Sparks Sharp Criticism as Central Bank Speaks Out

By Patrick Okino

The controversial Protection of Sovereignty Bill continues to spark sharp reactions across the country, with critics arguing that it is overly broad and could stifle civil society, restrict foreign investment, and target diaspora remittances.

The Bank of Uganda has raised concerns about the potential economic impact if the Bill is passed in its current form, warning of likely currency depreciation.

“The mandate of BoU is to promote price stability and a sound financial system. What will be the impact of this Bill on price stability if it is passed the way it is?” questioned Governor Michael Atingi-Ego while appearing before Parliament’s Committee on Defence and Internal Affairs.

He added that the Bill could trigger depreciation of the currency, leading to higher domestic prices due to increased costs of imported goods.

“Because of the depreciation of the currency that is likely to occur as an unintended consequence of this Bill, we are likely to see a pass-through effect from imported items into domestic prices, which will significantly raise prices,” he said.

The Protection of Sovereignty Bill, 2026, seeks to regulate foreign funding and influence, ostensibly to safeguard national sovereignty. It introduces strict registration, funding, and reporting requirements for individuals or entities classified as “agents of a foreigner.” It also requires prior ministerial approval for foreign funding exceeding approximately UGX 400 million annually.

Atingi-Ego warned that inflation could rise as a result of exchange rate depreciation, forcing policymakers into a difficult position.

“We will either have to tighten monetary policy further to contain inflation or allow inflation to exceed the 5% target. If we choose not to raise interest rates, then that is what we will have to grapple with,” he said.

He added that the current inflation rate of around 3% could be undermined by these developments.

The Governor further warned that reduced financial inflows could destabilize Uganda’s balance of payments.

“The moment you tamper with these inflows, we risk running down our reserves, and that is an economic disaster for a country,” he said.

World Bank

The World Bank has also objected to the proposed legislation, warning that it could expose a broad range of its development activities to criminal liability, including organizing meetings where alternative policy ideas are discussed.

The institution raised concerns that provisions in the Bill could interpret the publication of economic assessments—such as fiscal analyses, creditworthiness reviews, and governance reports—as actions that “weaken” Uganda’s economic standing.

In a formal submission to Parliament dated April 23, the World Bank warned that the draft law could criminalize routine activities such as policy dialogue, research publication, and stakeholder engagement—core functions of its mandate.

Mbarara University

Mbarara University of Science and Technology (MUST) has also expressed concern about the potential impact of the Bill on academic work.

In a letter dated April 24, 2026, addressed to the Clerk to Parliament, the university said that while it supports efforts to safeguard national sovereignty, the proposed law could unintentionally disrupt legitimate academic functions.

The university noted that its mandate—teaching, research, innovation, and community engagement—often involves partnerships, grants, scholarships, and collaborations with both local and international actors.

Makerere University

Meanwhile, lecturers under the Makerere University Academic Staff Association warned that the proposed law risks criminalizing core academic activities.

“We contend that these outcomes are not only unconstitutional, but would also make the work of academic staff and universities impossible,” said chairperson Jude Ssempebwa in a memorandum to Parliament.

Uganda Medical Association

The Uganda Medical Association (UMA) asked Parliament not to use the Bill as a political instrument, arguing that passing the Bill in its current format without robust safeguards for the health sector will; harm patients, weaken the health system, disrupt essential services and isolate Uganda from global scientific and medical advancement.

Dr. Frank Asiimwe, President of Uganda Medical Association, while appearing before Parliament’s Joint Committee of Legal and the Committee of Defence and Internal Affairs, to present the Association’s views on the Bill, where they noted that any nation’s sovereignty is as strong as its healthcare system, whose future is being threatened by proposals in the Bill.

NUP

The National Unity Platform described the Bill as dangerous and unconstitutional, arguing that it undermines democratic governance.

“Its alleged objective of protecting Uganda’s sovereignty is contradicted by provisions that dismantle civic, political, and associational freedoms through which citizens exercise that sovereignty,” said Secretary General Lewis Rubongoya.

Minister Balaam

However, State Minister for Youth and Children Affairs Balaam Barugahara in his X defended the Bill, emphasizing the importance of national security.

“As both a leader and a businessperson, I support a strong Sovereignty and National Security Bill. No nation can thrive if it cannot protect itself from harmful infiltration,” he said.

He pointed to similar frameworks in countries such as the United States, United Kingdom, Australia, and others, arguing that Uganda must strike a balance between promoting investment and safeguarding national security.

“Uganda must protect critical sectors, ensure transparency, and avoid unnecessary barriers to trade and investment,” he said, urging legislators to pass the Bill with balanced economic amendments.

He added that national security remains the foundation of prosperity, calling for a framework that supports both development and stability.

The Bill is currently before Parliament of Uganda, seeks to tighten regulation of foreign influence and financial flows into the country.

Parliament is expected to continue receiving views from stakeholders before the Bill proceeds to the next stage.

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