The Uganda Law Society has declared that the Certificate of Financial Implications issued by the Ministry of Finance for the Protection of Sovereignty Bill, 2026, is “unlawful, void, and of no legal effect,” citing major breaches of the Public Finance Management Act (PFMA).
In a statement dated April 29, 2026, signed by ULS Vice President Anthony Asiimwe, the legal body called for the immediate withdrawal and reissuance of the certificate, arguing that it fails to comply with Section 74 of the PFMA and established financial assessment guidelines.
The statement was addressed to State Minister for Finance, Planning and Economic Development Amos Lugoloobi, who issued the contested certificate on April 15, 2026.
“The Certificate lacks methodological rigour, ignores identifiable revenue sources, and substitutes aspirational policy statements for the required balanced economic analysis. It is manifestly unlawful, void, and of no legal effect,” the statement read.
At the centre of the dispute is government certification that the Protection of Sovereignty Bill, tabled by State Minister for Internal Affairs David Muhoozi, had satisfied the financial scrutiny required before parliamentary consideration.
The proposed legislation seeks to tighten regulation of foreign influence in Uganda’s political, economic, and digital spaces. It introduces stricter oversight of NGOs, foreign funding, digital platforms, and advocacy activities, while also creating new criminal offences and penalties.
However, ULS argues that the financial certificate supporting the Bill fails to meet statutory requirements in several critical areas.
The Ministry of Finance estimated implementation costs at Shs29.029 billion, covering administration, technology, capacity building, and enforcement. But ULS criticized the estimate as a “single aggregate sum” lacking itemisation, assumptions, methodology, and clarity on whether the projected expenditures are capital or recurrent.
The Society also challenged the ministry’s assertion that the first year of implementation could be absorbed within the existing Shs14.593 billion budget of the Department of Peace and Security.
“The Bill imposes extensive new functions, yet the Certificate provides no analysis of how current expenditures would be reprioritised,” the statement read.
ULS further accused the Finance Ministry of presenting what it described as an incomplete and misleading fiscal picture by claiming the Bill would not generate revenue.
According to the Society, the legislation explicitly creates several revenue streams, including registration and renewal fees for foreign agents, criminal fines of up to Shs4 billion, civil penalties imposed on financial institutions, and asset forfeiture provisions.
“By failing to identify or quantify these revenue streams, the Certificate presents only the expenditure side of the fiscal equation,” the statement noted.
The Society argued that this omission denies Parliament the balanced financial information required under the PFMA to properly assess the Bill.
Beyond the fiscal concerns, ULS also faulted the certificate’s economic analysis, describing it as superficial and legally insufficient.
While the Ministry of Finance argued that the Bill would strengthen national sovereignty, governance stability, and policy autonomy, ULS said these assertions merely repeated government policy objectives without providing a genuine economic impact assessment.
The Society further pointed to a technical submission from Bank of Uganda dated April 28, 2026, warning of potential economic risks associated with the proposed law.
According to ULS, the Bank of Uganda flagged concerns including a possible chilling effect on foreign direct investment, currently estimated at around USD 3.4 billion annually, as well as disruptions to more than USD 420 million in foreign aid channelled through NGOs.
The legal body also warned of possible job losses in the NGO sector, which it estimates could affect between 20,000 and 50,000 workers.
Additional concerns raised include potential constraints on fintech innovation and the digital economy, risks to diaspora remittances estimated at USD 1.5 billion annually, and broader macroeconomic instability including capital flight, exchange rate volatility, and rising interest rates.
ULS further cautioned that some provisions in the Bill — including the broad definition of “foreigner” and extensive ministerial approval requirements — could operate as de facto capital controls and damage investor confidence.
In response, the Society demanded the immediate withdrawal of the April 15 certificate and its replacement with a fully compliant version containing detailed cost breakdowns, quantified revenue projections, and a balanced economic impact assessment developed with input from relevant experts, including the Bank of Uganda.
Pending those corrections, ULS urged Parliament to suspend any further consideration of the Bill.
“We demand that Parliament halt any further consideration of the Bill until a compliant Certificate is issued,” the statement read.
In the contested certificate, Lugoloobi defended the legislation as a necessary mechanism to regulate foreign influence and align external financing with Uganda’s development priorities.
The Ministry maintained that while the Bill would not directly generate revenue, it would create a more stable and secure environment capable of supporting long-term national development.
