Bank of Uganda Governor Michael Atingi-Ego has warned Parliament that the proposed Protection of Sovereignty Bill could trigger far-reaching economic disruptions, urging lawmakers to reconsider key provisions before enactment.
Appearing before a joint parliamentary committee scrutinising the Bill, Atingi-Ego framed his submission around macroeconomic stability, cautioning that the legislation—while well-intentioned in protecting national sovereignty—risks undermining the very economic foundations it seeks to defend.
He told legislators that restricting cross-border financial flows, including remittances, foreign direct investment, and portfolio inflows, would weaken Uganda’s external position and erode foreign exchange reserves. “A country without reserves is not sovereign,” he stated, warning that reduced inflows could lead to sharp currency depreciation and imported inflation.
The Governor further argued that the Bill introduces regulatory uncertainty that could trigger capital flight and dampen investor confidence, ultimately reversing decades of economic progress. He described the potential impact as severe, noting that disruptions to financial inflows would destabilise the banking system and compromise monetary policy effectiveness.
Atingi-Ego also raised concerns about the Bill’s broad definition of “agents of foreigners,” which could inadvertently capture millions of Ugandans, particularly those in the diaspora who send remittances back home. Such provisions, he warned, would place significant compliance burdens on financial institutions and distort normal financial transactions.
In addition, the central bank chief cautioned that the Bill could create overlapping regulatory mandates, potentially undermining the constitutional independence of the Bank of Uganda and fragmenting oversight of the financial system.
He emphasised that Uganda’s economic sovereignty is best preserved through strong reserves, stable financial systems, and predictable policy frameworks—not restrictive controls that limit engagement with global markets.
The Governor’s submission comes amid intense scrutiny of the Bill by Parliament’s defence and legal committees, with growing concern from financial institutions and development partners that the proposed law could disrupt Uganda’s investment climate and long-term growth trajectory.