Former deputy Attorney General Mwesigwa Rukutana has asked the government to withdraw the controversial Protection of Sovereignty Bill, 2026. Rukutana suggests a need for widespread consultations to improve it with “a view to making it less toxic, or better still, shelve it.” Rukutana, who also served as state minister for Finance and state minister for Labour under the current National Resistance Movement (NRM), said the government ought to address the concerns in the Bill tabled by the ministry of Internal Affairs.The Bill is currently being considered by the joint committee on defence and internal affairs and the legal and parliamentary affairs defense and internal affairs. Rukutana said the government only needs to improve on the existing legal and regulatory frameworks. Similar sentiments have been raised by civil society actors, lawyers, and the Uganda Bankers Association, among others. Rukutana says the Bill, as it is in its current form, risks the country’s hard-earned gains from economic liberalisation, adding that Uganda could be heading towards a damaging policy shift.Rukutana’s remarks follow reservations from the Bank of Uganda, financial sector stakeholders, and activists who argue that the Bill, in its current form, is most likely to destabilize the financial system, disrupt banking operations, and undermine investor confidence if left to be enacted in its current form. Speaking from his own experience, Rukutana stated that while he was a state minister for Finance, Uganda was classified as a Highly Indebted Poor Country (HIPC). During the period, the country’s economy was characterized by deep economic vulnerability marked by heavy dependence on external financing and borrowing. “That categorization was a nightmare. More than half of our national budget was financed by foreign sources, grants, donations, and borrowing mainly from the World Bank, the International Monetary Fund, and donor countries,” said Rukutana.He explained that under such conditions, Uganda had limited control over its own economic direction.“We could not independently decide our priorities. Our budgets, development plans, and national projects had to be approved by the World Bank, IMF, and the donor community,” he said.According to Rukutana, Uganda was advised to implement a series of reforms to restore macroeconomic stability and regain economic independence. These included increasing production and productivity, expanding exports, reducing luxury imports, and managing inflation.The biggest pillar of those reforms, he noted, was the full liberalisation of capital flows. “We were advised to allow foreign money to come in freely and for investors to repatriate their profits without hindrance, and Uganda adopted policies and legal frameworks to ensure ‘the highest level of liberalisation,” he added.Rukutana recalled the intense scrutiny Ugandan officials faced at international platforms such as the Spring Meetings in Washington and donor conferences, where he said adherence to reform conditions, especially liberalisation, was closely monitored. “And I remember all the policies and legal frameworks we put in place to ensure the highest level of liberalisation. And then, it worked!! Not only do we fully finance our budget today, but we have built a sizable amount of reserves,” he said. “We have managed, notwithstanding so many imponderables, to control inflation and to have an above-average growth rate. The economy has expanded both quantitatively and qualitatively. We are told that we have now attained the Middle Income Status,” he added,He revealed that often, he travelled with senior economists and technocrats with whom he worked, and they would be grilled on how far they had gone in implementing those conditionalities. He said these included former permanent secretary, ministry of Finance Chris Kassami, former Bank of Uganda governor Emmanuel Tumusiime-Mutebile, and former permanent secretary to the treasury Keith Muhakanizi.He said the reforms they put in place delivered tangible results. It is against this historical background that Rukutana questioned the rationale behind the Protection of Sovereignty Bill, which proposes strict controls on foreign funding, including caps and mandatory approvals.“I am not an economist, but a mere courtroom lawyer,” Rukutana said. “But I ask: have we now arrived and find it necessary to engage in policy reversal? Why should we depart from a route that has brought us this far?”He warned that abandoning liberalisation at this stage would be akin to discarding the cloth that has carried the baby on our back all this long, and invoked a traditional metaphor which shows the risks of abandoning a proven policy path.Rukutana, a strong cadre of NRM and former MP, has also emphasised the importance of remittances from Ugandans in the diaspora, describing them as a critical pillar of the economy.During his tenure as minister of state for Labour in 2011 and 2020, he said the government made deliberate efforts to ease remittance flows.“We worked tirelessly to smooth the route for remittances, and they grew from about $400 million to $600 million, and by the time I left, they were approaching $900 million. Today, they are estimated at about $1.6 billion,” he said.He cautioned that provisions in the Bill could inadvertently disrupt these inflows, which serve as a lifeline for many households and a key source of foreign exchange.“The Governor of the Bank of Uganda has indicated that we now have sizable reserves and a positive balance of payments. To a large extent, it is our liberalisation policy that has allowed unlimited capital inflows and contributed to this positive story,” he added.While acknowledging the state’s responsibility to monitor financial flows for security and macroeconomic stability, Rukutana maintained that Uganda already has mechanisms to address such concerns.“There are and have always been systems to monitor and regulate. If there is any gap, it should be addressed by improving the existing legal and regulatory frameworks,” he said. He further pointed to what he described as recent policy reversals that have begun to yield negative outcomes, citing the reintegration of agencies such as the Uganda National Roads Authority (UNRA) and the Rural Electrification Agency (REA) into parent ministries. “If you are rural-based, you must have noticed the difference by now,” he said. He explained that such decisions have had visible consequences on service delivery. Rukutana also noted that opposition to the Bill has emerged from a broad cross-section of society, including financial institutions, civil society organizations, and the private sector.“We legislate for the people. If any law is contrary to the wishes and aspirations of the people, then it must not be enacted,” he said. He warned that forcing through such legislation could render it ineffective.“It will either be applied more in breach than observance or remain on paper like the colonial ‘Prohibition of the Manufacture and Consumption of Enguili Act’,” said Rukutana.The Bank of Uganda Governor, Michael Atingi-Ego, on Tuesday told parliament that the Protection of Sovereignty Bill, 2026, is likely to destabilize Uganda’s financial system, disrupt banking operations, and isolate the country from the global economy if passed in its current form. Atingi-Ego argued that several provisions in the Bill introduce what it described as radical uncertainty. Supporters of the Sovereignty Bill argue that it is intended to protect Uganda’s sovereignty and economy from undue foreign influence, particularly in financial flows. It proposes strict controls on external funding, including requiring approval from the minister of Finance before funds are received.It also outlines heavy penalties for violations, including fines of up to Shs 2 billion for individuals and Shs 4 billion for organisations, alongside possible imprisonment. However, those opposed to it argue that such restrictions could harm the economy. According to data from the ministry of Finance, Ugandans living abroad remit over Shs 3 trillion annually, a critical lifeline for many households.The opposition is also worried that limiting such inflows could have direct negative effects on both livelihoods and national economic stability, especially given Uganda’s reliance on external financing and its borrowing behaviourThe post Sovereignty Bill: Shelve it, former Attorney General tells gov’t appeared first on The Observer.