Business 18 April 2026 Daily Monitor (Uganda)
Uganda Bankers Warn Sovereignty Bill Could Freeze Credit and Deter Investment
The Uganda Bankers’ Association has cautioned that the draft Protection of Sovereignty Bill 2026 risks disrupting banking operations, delaying remittances, and repelling foreign capital essential for economic growth. They highlight concerns over broad definitions of foreign agents and low thresholds for funding approvals that could impact routine transactions. Source: https://www.monitor.co.ug/uganda/news/national/ugandan-bankers-sovereignty-bill-risks-credit-freeze-hurts-investment-5428260
The Uganda Bankers’ Association (UBA) has raised alarms over the draft Protection of Sovereignty Bill 2026, stating it could severely hamper lending and foreign investment needed for Uganda’s ambitious GDP expansion targets.
In a letter dated April 13, 2026, to the Attorney General, UBA Executive Director Wilbrod Humphreys Owor explained that key provisions clash with efforts to boost private sector credit under the national ATMS strategy. He stressed support for protecting sovereignty but urged reconsideration of the bill’s effects on Uganda’s investment environment.
A major issue is the bill’s definition of an ‘agent of foreigner,’ which covers anyone supervised, controlled, financed, or subsidized by foreigners. This could ensnare nearly all Ugandan banks, given their foreign shareholders, offshore borrowing, or roles in channeling development finance to small businesses.
The legislation prohibits foreign financial support exceeding 20,000 currency points—roughly Shs400 million or $107,000—over 12 months without ministerial approval. UBA deems this cap too low for standard bank deals like lines of credit or syndicated loans, which often dwarf it by 100 times. Unapproved funds face forfeiture, potentially stalling wholesale funding.
Cross-border transfers would require banks to verify fund origins, obtain ministerial clearance before payouts, and submit monthly reports, with fines up to Shs4 billion for violations. This duplicates existing anti-money laundering rules and could slow $1.4 billion in annual remittances.
Other clauses demand declarations of foreign funding sources, with jail time for false statements, and criminalize ‘economic sabotage’ through acts or publications harming the economy. Bankers fear this stifles transparency vital for financial stability.
UBA proposes exemptions for Bank of Uganda-licensed institutions, affirmation of central bank oversight, alignment with current AML frameworks, and a higher funding threshold or blanket exemptions for routine banking.
These adjustments, they argue, would safeguard sovereignty goals while supporting credit for oil, agriculture, and infrastructure. The Attorney General’s office had no response at press time; the letter went to key officials including the Bank of Uganda Governor.
Source: Daily Monitor (Uganda)