The Governor of the Bank of Uganda, Michael Atingi-Ego, has issued a stark warning to Parliament over the controversial Protection of Sovereignty Bill, 2026, cautioning that its current form could trigger serious economic consequences and undermine the very sovereignty it seeks to protect.
Appearing before Parliament’s Joint Committee of Defence and Internal Affairs, and the Legal and Parliamentary Affairs Committee alongside his deputy Augustus Niwagaba, Atingi-Ego made a rare and candid intervention, urging legislators to reconsider key provisions of the proposed law.
“True national sovereignty is built on economic strength and financial independence… a country without reserves is not sovereign,” he lectured.
“While the goal of protecting national interests is legitimate, The Protection of the Sovereign Bill 2026 as currently drafted risks reversing three decades of successful financial development through liberalisation that has sustained economic growth. By adopting these technical refinements, we believe that parliament can safeguard the nation without compromising the world-class financial architecture essential for Uganda’s journey to achieve the US$500bn economy.”
The Governor went further to outline what he described as potentially disastrous macroeconomic implications if the Bill is passed without amendments.
“The potential of this Bill to destabilize 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,” he explained.
“The mandate of BoU is to promote price stability and a sound financial system. What is the impact of this Bill on price stability if it is passed the way it is? Because of the depreciation of the currency that is likely to occur as an unintended consequence of this Bill, we are likely to have a depreciated currency and the pass-through of imported items into domestic prices is going to raise prices significantly. So, our inflation is going to increase via the depreciation of the exchange rate. That means that we will need to either tighten monetary policy further if we are going to contain inflation, or we allow inflation to go beyond the 5% target if we don’t want to raise interest rates. That’s what we will have to grapple with. This inflation of 3% we have been enjoying is likely to be compromised through currency depreciation.”
Central Bank Left Out
In a revelation that sparked concern among legislators, Atingi-Ego disclosed that the central bank was not consulted during the drafting of the Bill.
This admission drew sharp reactions from MPs, including Jonathan Odur and Abdu Katuntu, who questioned the government’s approach to crafting such a far-reaching law without input from the country’s chief financial regulator.
Odur pressed the Governor, asking, “My question is, did you get opportunity to advise government on the monetary implications of this shift regarding this bill? In other words, how have you interacted with the executive, particularly touching what you have presented to us and how did they, if that opportunity was there, what feedback did you get from the executive?”
A Controversial Bill
The Protection of Sovereignty Bill, 2026, is being advanced by the government as a legal framework aimed at shielding Uganda from what officials describe as foreign interference in domestic affairs.
Government officials backing the Bill argue that it is necessary to regulate external funding—particularly to non-governmental organisations (NGOs)—and to limit foreign influence on Uganda’s political, economic, and social systems. Proponents say the law will strengthen national security, protect cultural values, and assert Uganda’s independence in decision-making.
Key provisions include tighter controls on foreign funding, enhanced state oversight of civil society organisations, and penalties for entities deemed to be acting against national interests.
Opposition
However, the Bill has faced mounting resistance from opposition leaders, civil society organisations, and sections of the public, who warn that it could shrink civic space and damage Uganda’s international standing.
Critics argue that restricting foreign inflows could hurt development programmes heavily reliant on donor funding, while also discouraging investment and partnerships. Others fear that vague provisions in the Bill could be used to target dissenting voices and weaken democratic institutions.
What’s Sovereignty?
The debate around the Protection of Sovereignty Bill, 2026 has now evolved into a broader national conversation about what sovereignty truly means. While the government frames the Bill as a tool for safeguarding Uganda’s independence, the central bank is warning that economic fragility could, in fact, erode that very sovereignty.
As Atingi-Ego’s remarks suggest, the country now faces a critical policy choice—whether to pursue sovereignty through tighter controls or through maintaining strong economic fundamentals and global financial integration.
Months ago, government froze bank accounts of several NGOs, holding up billions of money. (See Details Here and There).
Uganda’s military chief has previously threatened to chase US and German Ambassador for reportedly undermining Uganda’s sovereignty and constitution. (See Details Here and There).
Museveni’s government officials have also accused the European Union of giving activists money and awards to fight Museveni, as reported Here.
