Politics 28 April 2026 The Observer (Uganda)
Bank of Uganda Opposes Sovereignty Bill Over Economic Risks
The Bank of Uganda has voiced strong opposition to the Protection of Sovereignty Bill, 2026, citing threats to external reserves, currency stability, and overall economic health. Governor Michael Atingi-Ego highlighted how curbing foreign inflows could lead to reserve depletion and inflation spikes. Source: https://observer.ug/news/bank-of-uganda-also-rejects-sovereignty-bill
The Bank of Uganda has added its voice to critics of the proposed Protection of Sovereignty Bill, 2026, which aims to limit unauthorized foreign funding to Shs 400 million without ministerial approval.
Governor Michael Atingi-Ego told a parliamentary joint committee on Tuesday that such restrictions could jeopardize the nation’s balance of payments and external reserves, currently nearing $6 billion thanks to recent $1.5 billion surpluses from inflows.
“A country without reserves is not sovereign,” Atingi-Ego stated, warning that tampering with these funds risks economic disaster, shilling depreciation, higher import costs, and inflation exceeding the 5% target.
He explained that reduced inflows might force tighter monetary policy or allow price pressures to build, eroding current low inflation around 3%.
The central bank’s stance echoes broader backlash from civil society, legal bodies like the Uganda Law Society, groups such as CSBAG, telecom firms, international observers including Human Rights Watch, and some opposition MPs, who fear impacts on civic space, development aid, FDI, and operations.
Economists emphasize foreign exchange from investments, remittances, and aid as vital for stability and growth, cautioning against volatility from sudden curbs.