KAMPALA, April 22, 2026 — A new economic impact assessment by the Citizens Coalition Against the Sovereignty Bill has sparked fresh debate in the country over the proposed Protection of Sovereignty Bill 2026, warning that while the legislation aims to shield Uganda from undue foreign influence, it could come at a steep economic cost.
The Bill seeks to regulate foreign involvement in Uganda’s domestic affairs by introducing stricter requirements on registration, disclosure and oversight of individuals or organisations deemed to be acting on behalf of foreign interests. It also places tighter controls on foreign funding and participation in policy processes.
However, Citizens Coalition Against the Sovereignty Bill in its assessment argues that the sweeping nature of the proposed law could disrupt key economic lifelines in a country heavily reliant on global financial flows.
Bill could cut foreign inflows and slow growth
According to the assessment, Uganda currently collects between Shs 30 trillion and Shs 40 trillion in domestic revenue annually, but depends significantly on foreign inflows, such as foreign direct investment [FDI], remittances and donor support, which together exceed Shs 20 trillion each year.
The report estimates that if enacted in its current form, the Bill could reduce foreign inflows by between Shs 3 trillion and Shs 5 trillion annually. This, it says, could slow economic growth by up to one percentage point, cost between 20,000 and 30,000 jobs, and reduce government tax revenues by as much as Shs 1 trillion per year.
“These are not abstract figures,” the report notes. “They translate into lost jobs, reduced household incomes and weaker economic activity across the country.”
Investment and donor funding at risk
The coalition highlights concerns over the Bill’s potential impact on investment, noting that Uganda attracts an estimated US$ 2.5 billion to US$ 3 billion [about Shs 9 trillion to Shs 11 trillion] in FDI annually.
The Coalition argues that broad definitions of “foreign agents” and increased compliance requirements could create regulatory uncertainty, discouraging investors. Even a modest decline in investor confidence, the report says, could result in losses of up to Shs 1.5 trillion in investment each year, particularly affecting manufacturing, agriculture and extractive industries.
Foreign aid and development funding could also be affected. External financing currently contributes between Shs 8 trillion and Shs 10 trillion to Uganda’s budget annually, while NGOs inject an additional Shs 1.5 trillion to Shs 2 trillion into community programmes.
“If foreign funding declines by 20 to 30 per cent, Uganda could lose up to Shs 3 trillion annually,” the report warns, adding that such a shortfall could force government to increase borrowing or cut spending in critical sectors such as health and education.
Pressure on banks, remittances and the shilling
The report further cautions that the financial sector could face increased operational costs due to stricter compliance requirements on foreign-linked transactions. Banks and mobile money operators may pass these costs on to customers through higher fees and lending rates.
There are also fears that heightened scrutiny could discourage formal remittance flows. Uganda receives between US$ 2 billion and US$ 2.4 billion [about Shs 4.5 trillion to Shs 5.3 trillion] annually from its diaspora.
A decline of even 10 to 20 per cent, the coalition argues, would significantly affect household consumption, education spending and small business survival, particularly among low-income families.
“Remittances are not a luxury. They are a social safety net,” the assessment of the controversial bill states. “The bill risks severing this lifeline for millions of Ugandans.”
Jobs and local economies in the balance
The development and NGO sector, which supports tens of thousands of jobs, could also be hit hard. The report estimates that a 25 per cent reduction in foreign funding could lead to the loss of up to 30,000 jobs, particularly affecting young professionals.
Economists warn this could trigger a ripple effect: reduced incomes leading to lower consumption, forcing businesses to cut back and potentially causing further job losses.
“This is the anatomy of a local recession,” the doucment cautions.
Revenue losses could widen budget gap
The assessment also points to potential losses in government revenue. With Uganda’s tax collection closely tied to economic activity, slower growth and reduced consumption could shrink tax receipts by between Shs 500 billion and Shs 1 trillion annually.
Such a gap, analysts say, would likely be filled through increased taxation, additional borrowing, or cuts to public services.
Call for a balanced approach
Despite its concerns, the coalition acknowledges the importance of protecting national sovereignty but urges policymakers to adopt a more balanced approach.
“Sovereignty is not undermined by economic openness,” the report concludes. “It is strengthened by a resilient and dynamic economy.”
The findings are expected to fuel public debate as Uganda weighs how to safeguard its national interests without undermining investment, jobs and economic growth.
https://thecooperator.news/sebei-stakeholders-reject-sovereignty-bill-call-for-wider-consultations/
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