Uganda Scales Back Foreign-Funding Bill After Central Bank Warns of Economic Disaster

Uganda’s parliament has passed an amended version of the Protection of Sovereignty Bill that removes a provision requiring any Ugandan receiving money from abroad to register as a foreign agent, after the central bank warned the original text would cause an “economic disaster.”

The bill as originally drafted covered all foreign transfers, not just politically motivated funding. Uganda received roughly $2.5 billion in diaspora remittances in 2025 — about 3.8% of GDP — and the central bank views them as a primary buffer for the country’s foreign exchange reserves. Under the amended version, the foreign-agent registration requirement applies only to people receiving funds to advance foreign political interests. Penalties for violations remain unchanged at up to 10 years in prison.

Central Bank Governor Michael Atingi-Ego told lawmakers last week that the original provision would deplete those reserves. “A country without reserves is not sovereign,” he said. “The moment you tamper with these inflows here, we risk running down our reserves, and that is economic disaster for our country.” The World Bank also objected, warning that routine development activities could face criminal liability under the original language. The bill now awaits President Yoweri Museveni’s signature.

The law still bans anyone acting on behalf of foreign interests from developing or implementing policy without government approval — a provision rights groups say is written broadly enough to reach political opposition figures. Several of Uganda’s opposition parties have historically received foreign funding, and Museveni’s administration has long framed outside support for civil society as state interference. The World Bank suspended new lending to Uganda in 2023 over its anti-homosexuality law, only resuming two years later.

With remittances accounting for nearly 4% of GDP, Atingi-Ego’s intervention carried real weight. The amended bill removes the most commercially damaging clause, but the law’s broader thrust — tightening state control over foreign-funded activity — remains in place.

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