BoU Boss Trashes Sovereignty Bill!
A political storm is brewing in Kampala after Bank of Uganda Governor Michael Atingi-Ego came out guns blazing, warning that the controversial Protection of Sovereignty Bill, 2026 could drag the country straight into an economic crisis if passed in its current form. Speaking before a joint parliamentary committee, the central bank chief did not mince his words, painting a grim picture of a nation risking financial instability, a falling currency, and rising inflation—all in the name of sovereignty.
In a tense session before the Joint Committee on Defence and Internal Affairs and Legal and Parliamentary Affairs, Atingi-Ego delivered what many observers are calling one of the strongest warnings yet from the country’s top financial authority. His message was blunt and unsettling. “A country without reserves is not sovereign,” he declared, setting the tone for a detailed breakdown of what he believes could go terribly wrong.
The Governor revealed that Uganda’s current economic stability is heavily dependent on steady inflows of foreign capital, including investments, remittances, and portfolio funds. These inflows, he explained, are the backbone of the country’s foreign exchange reserves, which now stand at close to USD 6 billion. Just last financial year alone, Uganda recorded a balance of payments surplus of USD 1.5 billion, allowing the country to strengthen its reserve position by the same amount.
But that progress, he warned, is hanging by a thread.
“The moment you tamper with these inflows here, we risk running down our reserves, and that is economic disaster for a country,” Atingi-Ego cautioned, his remarks sending ripples through the committee room. His concern is that the proposed bill, which seeks to tighten control over cross-border financial flows, could choke the very lifeline that keeps Uganda’s economy afloat.
The implications, according to the central bank boss, go far beyond reserves. He warned that restricting inflows would inevitably weaken the Uganda shilling, triggering a chain reaction that would hit ordinary citizens the hardest. “Because of the depreciation of the currency that is likely to occur as an unintended consequence of this Bill, we are likely to have a depreciated currency and the pass-through of imported items into domestic prices is going to raise prices significantly,” he explained.
In simpler terms, a weaker shilling means more expensive imports, and that means higher prices across the board—from fuel to food to basic household goods. Atingi-Ego warned that inflation, currently stable at around 3 percent, could spiral out of control, blowing past the Bank of Uganda’s 5 percent target.
“That means that we will need to either tighten monetary policy further if we are going to contain inflation, or we allow inflation to go beyond the 5% target if we don’t want to raise interest rates,” he said, outlining a difficult choice that could see borrowing costs shoot up or living costs skyrocket.
The Governor also raised red flags about the potential institutional clash the bill could create. He hinted that the proposed law risks introducing parallel oversight mechanisms that could undermine the constitutional independence of the central bank. Such a move, he suggested, could weaken the very institution tasked with safeguarding economic stability.
In a revelation that has raised eyebrows, Atingi-Ego’s statements strongly suggest that the Bank of Uganda may not have been consulted during the drafting of the bill. For a policy with such far-reaching economic implications, that omission is already fueling debate about the process behind the legislation.
At the heart of his argument is a stark warning: sovereignty without economic stability is an illusion. “Chairman, a country without reserves is not sovereign,” he repeated, driving home the point that financial strength, not isolation, is what truly secures a nation’s independence.
As the debate over the Protection of Sovereignty Bill intensifies, Atingi-Ego’s intervention has dramatically raised the stakes. What was initially framed as a patriotic move to safeguard national interests is now being scrutinized as a potential trigger for financial turmoil.
With lawmakers under pressure and the central bank sounding the alarm, the country now finds itself at a crossroads. Push ahead with the bill and risk shaking the foundations of the economy, or rethink its provisions to avoid the looming storm.
One thing is clear: the warning has been issued, loud and unmistakable. Whether it will be heeded remains to be seen.
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