KAMPALA, Uganda — The proposed Sovereignty Bill has prompted formal concern from the financial sector, with bankers warning that parts of the draft law could affect Uganda’s integration with global financial systems and complicate routine banking operations.
In a submission to the Attorney General, the Uganda Bankers Association outlined what it described as potential regulatory and operational risks arising from certain provisions in the bill, particularly those related to cross-border financial flows and external financial engagements.
The association emphasized that while it supports the government’s objective of strengthening national control over strategic sectors, the legal framework must remain compatible with international banking standards. “We recognize the importance of protecting national economic interests,” the association stated in its communication. “However, care must be taken to ensure that proposed measures do not unintentionally disrupt financial intermediation, trade finance, and investor confidence.”
Industry sources indicate that banks are especially concerned about the possible tightening of rules governing foreign transactions and external funding channels. Such changes, they warn, could increase compliance costs and create uncertainty in correspondent banking relationships that support imports, exports, and remittance flows.
A Kampala-based financial analyst noted that the banking sector’s response reflects broader concerns about policy predictability. “The financial system relies heavily on trust and consistency,” the analyst said. “Even well-intentioned reforms can have unintended consequences if they are not carefully aligned with global practices.”
The Sovereignty Bill, currently under government review, is understood to be aimed at strengthening state oversight of key economic and financial decisions, with proponents arguing that it is necessary to reduce external influence on domestic policy direction.
However, critics within the private sector argue that the challenge lies in balancing sovereignty objectives with the realities of a globally interconnected economy. They warn that overly restrictive provisions could deter investment and slow financial sector growth.
The Attorney General’s office has not yet issued an official response to the concerns raised by the Uganda Bankers Association, but consultations with stakeholders are expected to continue as the drafting process progresses.
As the debate continues, attention is now focused on whether revisions will be made to address industry concerns before the bill is presented for further legislative scrutiny.
