Uganda Revises Foreign Funding Restrictions After Central Bank Alarm

Uganda’s parliament has passed a revised version of the controversial Protection of Sovereignty Bill after warnings from the country’s central bank that the original proposal could damage the economy and reduce foreign exchange inflows.

The bill, adopted late Tuesday, is now awaiting President Yoweri Museveni’s assent. The legislation is aimed at limiting what the government describes as foreign interference in Uganda’s political and policy affairs.

Earlier drafts of the law had sparked concern among financial institutions, civil society groups, opposition politicians, and international development partners because they required anyone receiving money from abroad to register as a foreign agent and disclose all foreign funds received. Critics warned the provisions could discourage remittances, foreign investment, and aid flows into the East African nation.

Uganda’s Central Bank Governor, Michael Atingi-Ego, had cautioned lawmakers that the original bill could trigger what he described as an “economic disaster” by weakening foreign exchange reserves and increasing inflationary pressures.

In response to the backlash, parliament amended the legislation so that the registration and disclosure requirements would apply only to individuals or groups receiving foreign funding for political activities linked to advancing foreign interests.

Despite the revisions, the law still contains strict provisions, including penalties of up to 10 years in prison for individuals accused of acting on behalf of foreign interests without government approval. It also criminalizes actions considered to promote foreign interests against Uganda’s national interests.

Human rights groups and opposition figures have continued to criticize the legislation, arguing that its broad wording could be used to suppress dissent, silence political opposition, and restrict civil society activities. The Ugandan government, however, insists the law is necessary to protect national sovereignty and prevent external interference in domestic affairs.