Bank of Uganda Governor Dr Michael Atingi-Ego has warned that the proposed Protection of Sovereignty Bill could weaken Uganda’s economy, currency, and financial independence.
While appearing before the Joint Committee on Defence & Internal Affairs and Legal & Parliamentary Affairs, Atingi-Ego warned Parliament against passing into law The Protection of Sovereignty Bill, 2026 in its current form, arguing that it will lead to economic sabotage through weakening of Uganda’s shilling, reduce financial inflows and make it hard for Uganda to service its public debt.
Atingi-Ego explained, “We are going to have a substantial depreciation of the currency because you need to make imports more expensive to equate imports to exports. So, this is the main risk of this bill, and also it means that our capacity to build reserves, because now the flows in the financial account are reducing, we won’t have any excess of financial flows in the financial account over the current account balance to build reserves.”
He warned that once such inflows fall, Uganda could have a substantial depreciation of its currency, and running down reserves would pose an economic disaster for the country.
“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. For example, last financial year, the overall balance of payment surplus was USD 1.5 billion. That’s how we were able to increase our reserve coverage by USD 1.5 billion. Today, as we speak, our reserves are close to USD 6 billion. Why? Because these inflows have been coming in. The moment you tamper with these inflows here, we risk running down our reserves, and that is economic disaster for a country.”
Atingi-Ego also cautioned that investors need open access to economic information, saying criminalising publications deemed harmful to the economy would damage confidence and increase borrowing costs because “markets rely on information, a wide array of information to do their pricing.”
He further said the Bill risks creating parallel oversight that could 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 through liberalisation that has sustained economic growth,” he noted.
He added: “By adopting these technical refinements, Parliament can safeguard the nation without compromising the world-class financial infrastructure essential for Uganda’s journey to a USD 500 billion economy.”
BoU was not consulted
Bank of Uganda admitted before Parliament that it was never consulted by the agencies behind the drafting of The Protection of Sovereignty Bill, 2026, prompting MPs to criticise the process the bill has been handled.
The Governor’s remarks were in response to questions raised by Jonathan Odur (Erute South) and Abdu Katuntu (Bugweri County), who sought clarification on whether the Bank of Uganda was consulted before the drafting and tabling of the Bill before Parliament.
Odur asked, “My question is, did you get the opportunity to advise the government on the monetary implications of this shift regarding this bill? In other words, how have you interacted with the executive, particularly touching on what you have presented to us, and how did they, if that opportunity was there, what feedback did you get from the executive?”
“That is the ugly position the government has put us into. There is a big, big problem, … “What we are doing today is what should have been done by the government,” said Abdu Katuntu.
Katuntu stated that from the moment the Governor started his submission, he was grappling with many questions in his mind as to what was going on in Uganda because the scrutiny of the Bill by Parliament should have been done by the Executive through consulting relevant stakeholders, so Government agencies don’t come before Parliament to oppose the same bill.
“What we are doing today is what should have been done by the government. Talking to the central bank, talking to the Financial Intelligence Authority (FIA), talking to Makerere University, talking to banks, talking to people who should be the stakeholders. But from all of them as they have appeared here, they seem to be so confused about who actually brought this sort of legislation here. That is the ugly position the government has put us into. There is a big, big problem,” said Katuntu.
Katuntu urged Bank of Uganda to have a discussion with the Ministry of Finance over the implications the Bill possesses to Uganda’s financial sector and ensure that what happened with the Bill doesn’t repeat in future.
“But as you go back, I think you need to engage your minister. You should have raised this issue in the cabinet. Other than you people coming here to the public, and now you can see the sort of conversation we are having. Like, government institutions seem not to agree, and that is quite ugly. 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,” added Katuntu.
BoU, in its submission, concluded that the potential of the Protection of Sovereignty bill to destabilise Uganda’s balance of payments is its primary concern as a central bank. “By criminalising economic research that identifies fiscal instability, the bill destroys what we call price discovery.”
This was echoed by Butembo County MP, David Livingstone Zijan, who said that passing this law would be “the greatest gift to the enemies of this country”. “If the bill passes, our enemies would not need to do anything,” said Zijan.
Ugandans in diaspora urge amendments
Ugandans in the diaspora, appearing via Zoom before the joint committee on Defence and Internal Affairs and Legal and Parliamentary Affairs, have urged Parliament to amend the proposed Protection of Sovereignty Bill, 2026.
They warn that provisions classifying citizens abroad as foreigners and restricting remittances risk undermining trust, investment, and family support systems, despite the diaspora’s significant economic contribution.
Timothy Kangajwe, based in the USA, said Ugandans abroad are not foreigners. “When a bill defines us as such, it’s not a drafting error; it’s a statement. We send US$2.5 billion home for families, not politics. Don’t put government between our children and us.”
Brian Mushana Kwesiga, former President of Uganda North America Association, said Protecting sovereignty is right, but citizens should not be confused with foreign agents. “It is difficult to ask Ugandans abroad to invest while defining them as foreigners. Build trust, don’t break it.”
Gloria Nalule, the Executive Director of Uganda Global Forum, said 77% of diaspora respondents want the bill amended. “Classifying Ugandans abroad as foreigners risks a two-tier citizenship.”