Introduction

The country, and in particular the NGO and Humanitarian sector in Uganda, has been following with interest the Government's intention to introduce the Protection of Sovereignty Bill, 2026 (hereinafter "the Bill"), also referred to as the National Sovereignty Bill. This Bill is aimed at strengthening Uganda's control over foreign influence by tightening oversight of foreign funding to organisations operating in Uganda.

This development follows last year's amendment of the Second Schedule of the Anti-Money Laundering Act, which excluded NGOs, churches and charitable organisations from the list of accountable persons, thereby relieving them of the obligation to report to the Financial Intelligence Authority (FIA). The current Bill, however, signals a reversal of that trend, seeking to impose more, not less, scrutiny on the relationships between local organisations and their foreign principals.

If passed by Parliament and assented to by the President, this Bill will have significant and wide-ranging effects on the NGO and Humanitarian sector in Uganda. In this alert, we highlight the key provisions of the Bill that NGOs must take note of, assess the potential impact on operations, and propose a way forward.

Overview of the Bill

The Bill is structured in five (5) parts and a schedule, comprising thirty (30) clauses in total. Its stated purpose is to:

The Bill applies to any person who acts as an “agent of a foreigner”, a term defined broadly to encompass virtually any organisations or individual whose activities are directed, financed, controlled or supervised by a foreigner or foreign entity, whether directly or indirectly.

Key Defined Terms NGOs Must Understand

The Bill provides the definitions of various terms; however, these should be of interest:

Key Provisions That Will Directly Affect NGOs

1. Registration Requirement

Under Clause 14, the Bill introduces a mandatory registration regime for all persons acting as “agents of foreigners”. No person will be allowed act as an agent of a foreigner unless registered with the Department responsible for peace and security and issued with a certificate of registration by the Minister of Internal Affairs. Acting without registration will be a criminal offence, attracting a fine of up to fifty thousand currency points (equivalent to UGX 1 billion) or imprisonment of up to ten (10) years, or both.

Registration certificates shall be valid for two (2) years and shall have to be renewed at least three months before their expiry. The Minister shall have powers to suspend or revoke a certificate on various grounds, including where the holder is deemed to pose a security threat, engages in disruptive activities, or is no longer a fit and proper person.

The broad definition of “agents of foreigners” means any NGO receiving funds from, or acting in the interest of, a foreign donor shall be required to register as an agent of a foreigner. This includes international NGOs with local offices, local NGOs receiving foreign grants, and organisations implementing projects on behalf of foreign governments or multilaterals. Failure to register will be a criminal offence.

2. Restriction on Foreign Funding

This is one of the most consequential provisions of the Bill. Under Clause 22, no person or agent of a foreigner may directly or indirectly obtain, solicit or receive any financial support, donation, loan or other assistance from a foreigner, whether in cash or in kind, exceeding twenty thousand currency points (equivalent to UGX 400 million) within a period of twelve (12) months, without the written approval of the Minister.

The violation of this provision will expose an organisations to a fine not exceeding two hundred thousand currency points (equivalent to UGX 4 billion) and an individual to a fine not exceeding one hundred thousand currency points or imprisonment of up to twenty years, or both. Additionally, any money or assistance received in contravention of this clause shall be forfeited to the State.

3. Prohibition of Certain Activities

Part II of the Bill intends to prohibit a wide range of activities under the guise of protecting sovereignty. These include:

Any actions in violation of these prohibitions shall be criminal offences punishable with hefty fines for legal entities and for individuals, fines or imprisonment or both.

The breadth of these prohibitions is of significant concern to the NGO sector as many legitimate activities of NGOs including advocacy, civic education, election monitoring, policy engagement, and economic reporting, could potentially fall within their scope.

4. Declaration of Funding Sources and Submission of Returns

Under Clause 21, agents of foreigners and any other person receiving funding from a foreigner shall be required to submit a declaration of the source of funds to the Minister and such declarations will be available for public inspection upon payment of a prescribed fee. Any false or misleading declaration shall be a criminal offence attracting a fine of up to seventy-two thousand currency points (equivalent to UGX 1.44 billion) or imprisonment of up to five (5) years on conviction.

Under Clause 25, supervised institutions (i.e. those licensed to facilitate cross-border money transfers) shall be prohibited from paying any funds to an agent of a foreigner without proof of registration and declaration of source of funds. They shall also be required to submit monthly reports to the Minister on all fund transfers to agents of foreigners.

Under Clause 26, agents of foreigners shall be required to submit periodic returns to the Minister detailing the amount of funds received and the purposes for which they were used. Failure to submit returns will be an offence punishable by up to twenty (20) years imprisonment or a fine of up to one hundred thousand currency points (equivalent to UGX 2 billion) for individuals, or a fine of up to two hundred thousand currency points for legal entities.

5. Inspection Powers

Under Clause 28, inspectors appointed by the Minister shall have broad powers to inspect the premises of any agent of a foreigner at any reasonable time and to request any information relevant to the purposes of the Act. Obstruction of inspectors, presentation of false documents, or refusal to comply with an inspector's orders shall be a criminal offence attracting a fine of up to two thousand currency points (equivalent to UGX 40 Million) or seven (7) years imprisonment, or both, on conviction.

Potential Impact on the NGO Sector

Operational Impact

The Bill's expansive definition of "agent of a foreigner" means that the vast majority of NGOs operating in Uganda whether local or international will be required to register. The registration and reporting processes involve extensive disclosure of organisational details, personnel, funding sources, agreements, and activities. This will impose a substantial administrative burden on organisations, a burden the previous amendment of the Anti-Money Laundering Act had just taken away.

Furthermore, the requirement for Ministerial approval for foreign funding above UGX 400 million in any twelve-month period introduces a significant bureaucratic hurdle that could delay or prevent the receipt of project funding, disrupting programme cycles and threatening organisational viability.

Chilling Effect on Advocacy and Civil Society

The broad and vague definitions of "disruptive activities" and the wide prohibition on influencing Government policy or operations could have a severe chilling effect on legitimate civil society activities. Many core functions of NGOs including but not limited to policy advocacy, civic education, human rights monitoring, election observation, and economic research and reporting, risk being caught within the scope of these provisions.

The severe penalties attached including up to twenty years imprisonment and fines reaching UGX 4 billion, are likely to deter organisations and individuals from engaging in activities that, while entirely lawful under international human rights norms, could be characterised as falling within the Bill's prohibitions. Notably, the introduction of the Bill also comes at a time when a number of NGOs have been suspended for reasons the NGO Bureau states includes intelligence information and activities prejudicial to national security.

Uncertainty and Ministerial Discretion

The Bill appears to confer very wide discretionary powers on the Minister of Internal Affairs, including the power to declare any person or entity a "foreigner", to prescribe additional grounds for suspension or revocation of registration, and to add activities to the list of regulated conduct by statutory instrument. This degree of ministerial discretion, with limited oversight or appeal mechanisms, creates significant legal uncertainty for organisations operating in Uganda.

Way Forward and Recommendation

In response to this Bill, NGOs and civil society organisations may take the following steps:

Conclusion

Various reports suggest a decline in the number of registered NGOs over the last few years, attributed to withdrawal of funding by donors including funding from the US government and increased government regulations aimed at tightening control over the sector, among other factors. The Protection of Sovereignty Bill, 2026 is a further attempt in this direction; its broad scope, severe penalties, and wide ministerial discretion without proper appeal mechanisms pose material operational, legal and reputational risks for organisations that receive foreign funding or act in any capacity that could be characterised as being in the interest of a foreigner.

While it may be argued that the purpose of protecting national sovereignty is constitutionally grounded, the manner in which the Bill seeks to give effect to this purpose raises serious concerns about its compatibility with the freedoms of association, expression and assembly guaranteed under the Constitution of Uganda and under international human rights law.

For any inquiries about this alert or further updates, please contact the authors below.

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