Da Dona
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- Dec 16, 2025
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The Bank of Uganda has warned that the proposed Protection of Sovereignty Bill, 2026 could destabilise Uganda’s economy by weakening the shilling, reducing foreign exchange inflows, and pushing up inflation.
📸: Michael Atingi Ego, Governor Bank of UG - The independent.
Appearing before Parliament’s Joint Committee on Defence and Internal Affairs and Legal and Parliamentary Affairs on Tuesday, BoU Governor Michael Atingi-Ego said the Bill, if passed in its current form, risks undoing decades of financial reforms and economic liberalisation.
“True national sovereignty is built on economic strength and financial independence,” Atingi-Ego said, warning that any disruption to foreign inflows could weaken Uganda’s balance of payments and put pressure on the local currency.
According to the Governor, Uganda recorded a $1.5 billion balance of payments surplus in the last financial year, which helped increase the country’s foreign reserves to nearly $6 billion.
He cautioned that tampering with these inflows could drain reserves and trigger what he called an “economic disaster.”
A weaker shilling would make imports such as fuel, medicines, machinery and industrial inputs more expensive—raising transport and production costs and potentially pushing inflation above BoU’s 5% target.
The warning adds to growing criticism from the financial sector, with the Uganda Bankers Association previously cautioning that the Bill could hurt investor confidence, disrupt lending, and slow economic growth.
The Protection of Sovereignty Bill, 2026 seeks to regulate foreign influence and funding in Uganda, but critics argue some of its provisions may have unintended economic consequences.
Source: The Nile post Ug.
Appearing before Parliament’s Joint Committee on Defence and Internal Affairs and Legal and Parliamentary Affairs on Tuesday, BoU Governor Michael Atingi-Ego said the Bill, if passed in its current form, risks undoing decades of financial reforms and economic liberalisation.
“True national sovereignty is built on economic strength and financial independence,” Atingi-Ego said, warning that any disruption to foreign inflows could weaken Uganda’s balance of payments and put pressure on the local currency.
According to the Governor, Uganda recorded a $1.5 billion balance of payments surplus in the last financial year, which helped increase the country’s foreign reserves to nearly $6 billion.
He cautioned that tampering with these inflows could drain reserves and trigger what he called an “economic disaster.”
A weaker shilling would make imports such as fuel, medicines, machinery and industrial inputs more expensive—raising transport and production costs and potentially pushing inflation above BoU’s 5% target.
The warning adds to growing criticism from the financial sector, with the Uganda Bankers Association previously cautioning that the Bill could hurt investor confidence, disrupt lending, and slow economic growth.
The Protection of Sovereignty Bill, 2026 seeks to regulate foreign influence and funding in Uganda, but critics argue some of its provisions may have unintended economic consequences.
Source: The Nile post Ug.
