The Uganda Bankers Association has formally written to the Attorney General expressing concern over aspects of the proposed Sovereignty Bill, warning that some provisions could have far-reaching implications for the financial sector and investor confidence.
In the correspondence addressed to the Attorney General, the bankers’ body reportedly questions sections of the draft legislation that touch on cross-border financial transactions, foreign participation in the economy, and regulatory oversight of international funding flows.
According to individuals familiar with the communication, the association argues that while the objective of protecting national sovereignty is understandable, certain clauses may unintentionally restrict legitimate banking operations and limit Uganda’s integration into global financial systems.
“We fully support the principle of safeguarding national interests,” the association stated in its letter.
“However, any measures introduced must be carefully balanced to avoid disrupting financial stability and the flow of investment into the country.”
The bankers further caution that ambiguous or overly restrictive provisions could increase compliance uncertainty for commercial banks, particularly those involved in correspondent banking relationships and international trade financing.
Financial sector analysts say the intervention reflects growing unease within the banking industry over regulatory proposals that may affect capital movement and foreign exchange operations.
One Kampala-based economist noted that “banks operate in a highly interconnected environment, and even minor restrictions can have significant ripple effects on trade and investment sentiment.”
The proposed Sovereignty Bill, which is currently under discussion within government circles, is understood to focus on strengthening national control over strategic economic and financial decisions.
Supporters of the initiative argue that it is intended to reduce external influence in domestic affairs and protect long-term economic independence.
However, critics—including industry stakeholders—warn that without careful drafting, such legislation could create uncertainty for international investors and financial institutions operating in Uganda.
The Attorney General’s office is yet to issue an official response to the concerns raised by the Uganda Bankers Association.
Meanwhile, consultations on the bill are expected to continue as government reviews submissions from key stakeholders.
As debate intensifies, the financial sector’s position is likely to play a significant role in shaping the final direction of the proposed legislation, particularly in balancing sovereignty objectives with economic competitiveness and financial stability.
