Ugandan Banks Oppose 'Foreign Agents' Bill Over Capital Flow Concerns

Ugandan banks are formally seeking exemptions from the proposed Protection of Sovereignty Bill 2026, citing potential disruptions to international financial operations and capital acquisition. The legislation, which was presented to parliament last week, aims to safeguard the nation from external interference by mandating the registration of all individuals and businesses that receive funds from outside the country. Under the proposed framework, any entity receiving foreign capital would be officially classified as an 'agent of foreigners.' This designation has sparked significant concern within the financial sector, as banks argue that such a label could create reputational risks and administrative hurdles for legitimate business operations. The banking industry contends that the measure will negatively impact their capacity to raise capital on the global stage. By stigmatizing foreign inflows, the bill may deter international investors and complicate the process of securing external financing necessary for economic growth. If enacted without the requested exemptions, the law could increase the cost of capital for Ugandan firms and create friction in the country's integration with global financial markets. The current standoff highlights the tension between the government's sovereignty objectives and the practical requirements of maintaining an open, investment-friendly financial environment.