Bank of Uganda Governor Dr. Michael Atingi-Ego
Political analyst David Soita Masinde says the ongoing debate on the Protection of Sovereignty Bill, 2026 has exposed growing strain between Parliament and the Executive, following strong objections raised by the Bank of Uganda before a parliamentary committee.
The Bill, currently under review, came under scrutiny on Tuesday when the Governor of the Bank of Uganda, Dr. Michael Atingi-Ego, warned MPs that its provisions could destabilise Uganda’s financial system by weakening foreign exchange inflows and undermining reserve accumulation.
Appearing before a joint committee of Parliament, the Governor pointed to recent macroeconomic gains, including a balance of payments surplus estimated at about USD 1.5 billion, saying these gains could be reversed if policy uncertainty is introduced.
He told MPs:
“The potential of this Bill to destabilise Uganda’s balance of payments is our primary concern as a central bank. A country without reserves is not sovereign in practical economic terms.”
He added that Uganda’s reserve position had only improved because of steady external inflows, warning that any disruption could quickly reverse progress made in stabilising the economy.
“MPs caught in a difficult institutional moment” — Masinde
Reacting to the developments, Masinde said the parliamentary process around the Bill reflects a breakdown in coordination between key state institutions, leaving MPs exposed to competing technical arguments.
He stated:
“𝘛𝘩𝘦 ‘𝘉𝘪𝘨 𝘏𝘦𝘢𝘥𝘴’ 𝘢𝘳𝘦 𝘧𝘪𝘯𝘢𝘭𝘭𝘺 𝘩𝘪𝘵𝘵𝘪𝘯𝘨 𝘵𝘩𝘦 𝘸𝘢𝘭𝘭. 𝘜𝘨𝘢𝘯𝘥𝘢𝘯 𝘔𝘗𝘴 𝘩𝘢𝘷𝘦 𝘴𝘱𝘦𝘯𝘵 𝘺𝘦𝘢𝘳𝘴 𝘪𝘨𝘯𝘰𝘳𝘪𝘯𝘨 𝘵𝘩𝘦 𝘱𝘶𝘣𝘭𝘪𝘤. 𝘕𝘰𝘸, 𝘵𝘩𝘦𝘺 𝘢𝘳𝘦 𝘣𝘦𝘪𝘯𝘨 𝘪𝘨𝘯𝘰𝘳𝘦𝘥 𝘣𝘺 𝘵𝘩𝘦 𝘌𝘹𝘦𝘤𝘶𝘵𝘪𝘷𝘦.”
He added that Parliament is now handling a Bill that did not go through what he termed full institutional consultation.
“The Sovereignty Bill has landed in Parliament without the usual alignment between the Executive, Bank of Uganda, and other technical agencies. MPs are now being asked to defend or reject a framework that even state institutions are still questioning,” he said.
Central bank warnings dominate committee debate
During the parliamentary session, BoU officials stressed that the country’s economic stability depends heavily on predictable foreign inflows and disciplined reserve management.
The Governor cautioned:
“If we weaken confidence in Uganda’s external position, the immediate effect will be pressure on the exchange rate, inflationary shocks, and reduced ability to finance imports.”
He further told MPs that central bank independence is not a theoretical issue but a practical safeguard for economic stability.
“Monetary policy must remain insulated. Once reserve management becomes uncertain, the entire macroeconomic framework is exposed,” he said.
Committee members reportedly sought clarification on whether the Bill could affect Uganda’s ability to attract investment and manage external debt obligations.
Institutional friction in focus
Masinde said the debate has highlighted a shift in how legislation is being processed, with less pre-legislative coordination between government agencies.
He observed:
“For years, Parliament operated within a system where Bills arrived fully prepared, with institutions already aligned. That structure is now under strain.”
He added that the current situation has created rare public disagreement among state agencies.
“We are seeing the Bank of Uganda, and other technical bodies, speaking in cautionary terms about government proposals in real time. That level of openness is unusual in our legislative process,” he noted.
“No one is fully comfortable with the Bill”
Masinde further argued that the debate has placed MPs in a politically sensitive position, as they weigh technical warnings against policy objectives tied to sovereignty and national control.
He said:
“What is emerging is a Bill that is not fully owned by the Executive in its technical detail, not fully supported by economic agencies, and not fully understood at parliamentary level.”
He added:
“In such a situation, Parliament becomes the arena where all these contradictions play out. That is exactly what we are seeing.”