KAMPALA, Uganda — The Governor of the Bank of Uganda, Michael Atingi-Ego, has warned that the proposed Protection of Sovereignty Bill, 2026, could trigger serious economic instability if passed in its current form.
Appearing before a joint sitting of Parliament’s Defence and Internal Affairs Committee and the Legal and Parliamentary Affairs Committee, Atingi-Ego cautioned that the Bill risks weakening Uganda’s currency, reducing financial inflows, and undermining the country’s ability to service public debt.
“We are going to have a substantial depreciation of the currency because you need to make imports more expensive to equate imports to exports,” Atingi-Ego said. “So, this is the main risk of this bill… we won’t have any excess of financial flows in the financial account over the current account balance to build reserves.”
He warned that declining inflows could erode Uganda’s foreign exchange reserves, posing a major threat to economic stability.
“Chairman, a country without reserves is not sovereign. The potential of this Bill to destabilise Uganda’s balance of payments is our primary concern as a central bank,” he said. “The moment you tamper with these inflows here, we risk running down our reserves, and that is economic disaster for a country.”
The Governor also raised concerns about provisions that could criminalise economic research and restrict access to financial information, warning that such measures would undermine investor confidence.
“Markets rely on information, a wide array of information to do their pricing,” he said, adding that limiting this flow would increase borrowing costs and weaken Uganda’s financial credibility.
Atingi-Ego further argued that the Bill could create overlapping regulatory structures that undermine the constitutional independence of the central bank.
“True national sovereignty is built on economic strength and financial independence. While the goal of protecting national interests is legitimate, the Protection of Sovereignty Bill 2026, as currently drafted, risks reversing three decades of successful financial development,” he said.
The central bank also revealed it was not consulted during the drafting of the Bill, drawing criticism from lawmakers.
Erute South MP Jonathan Odur questioned the lack of engagement: “Did you get the opportunity to advise the government on the monetary implications of this shift regarding this bill?”
Bugweri County MP Abdu Katuntu described the situation as deeply flawed. “What we are doing today is what should have been done by the government… There is a big, big problem,” he said, criticising the absence of consultations with key institutions.
Katuntu added: “Government institutions should agree. So, by the time you bring a bill to us in Parliament, you should have agreed with government departments or agencies. There must have been enough consultation.”
Concerns were also echoed by Butembe County MP David Livingstone Zijan, who warned that passing the Bill in its current form would be harmful.
“If the bill passes, our enemies would not need to do anything,” he said, describing it as “the greatest gift to the enemies of this country.”
Meanwhile, Ugandans in the diaspora also urged Parliament to amend the Bill, warning that provisions classifying them as foreigners and restricting remittances could damage trust and investment.
“We send US$2.5 billion home for families, not politics. Don’t put government between our children and us,” said Timothy Kangajwe, a Ugandan based in the United States.
Brian Mushana Kwesiga, a former leader of the Uganda North America Association, added, “Protecting sovereignty is right, but citizens should not be confused with foreign agents. Build trust, don’t break it.”
Gloria Nalule, Executive Director of the Uganda Global Forum, said most diaspora respondents favour changes to the Bill. “Classifying Ugandans abroad as foreigners risks a two-tier citizenship,” she said.
The Bank of Uganda concluded that the Bill’s potential to destabilise the country’s balance of payments remains its primary concern, warning that restricting economic analysis could undermine price discovery and long-term financial stability.
Parliament is expected to continue scrutinising the proposed legislation amid growing calls for wider consultations and amendments.
