Uganda’s Parliament on Tuesday evening passed the Protection of Sovereignty Bill, 2026, following heated debate over its economic and constitutional implications, particularly its potential impact on financial regulation, foreign inflows and institutional independence.
During earlier parliamentary committee sessions, Bank of Uganda Governor Michael Atingi-Ego raised strong concerns about the proposed law, warning that it could disrupt macroeconomic stability at a time when the country is managing a widening trade deficit and limited foreign reserves.
He cautioned that Uganda’s economy remains highly dependent on external inflows such as remittances, portfolio investment and export earnings.
Any measures that restrict capital movement, he argued, could weaken the shilling, increase borrowing costs and strain reserves, which he said stand at a delicate balance.
The Governor also told MPs that parts of the Bill may overlap with the constitutional mandate of the central bank, particularly in relation to monetary policy independence and financial sector oversight.
He warned that introducing parallel control structures could affect investor confidence and complicate economic management.
Despite those warnings, lawmakers proceeded to approve the legislation in a late evening sitting, paving the way for its next stages in the legislative process.
The debate then took a political turn after Chief of Defence Forces Gen. Muhoozi Kainerugaba issued a public caution directed at the central bank governor.
“My friend the Governor of the Central Bank should be careful about his statements,” Muhoozi said shortly after the Bill’s passage.
His remarks appeared to respond to the governor’s earlier warnings, which had drawn attention within political and financial circles for their strong tone on the possible economic risks of the new law.
The exchange has added a new layer of tension to an already contentious piece of legislation that has divided opinion between economic managers and political actors.