Key insights
- The World Bank is concerned that Uganda's proposed foreign funding law could hinder its operations and expose routine development activities to criminal liability. This could impact the flow of funds into the country and potentially affect Uganda's economic development. While the direct impact on US equities is limited, it highlights broader geopolitical risks and potential disruptions to global development initiatives.
Investing.com -- The World Bank has informed Uganda’s government that proposed legislation to regulate foreign funding recipients could obstruct its operations in the country, according to a letter dated April 23 seen by Reuters.
The legislation, introduced in parliament on April 15 by President Yoweri Museveni’s government, requires any Ugandan receiving money from outside the country to register as a foreign agent and disclose all incoming funds. The stated aim is to protect national sovereignty.
The proposed law prohibits foreign agents from hindering government policy implementation and criminalizes developing or promoting alternative public policies without government approval.
In its letter to parliament, the World Bank said the law could expose a broad range of its routine development activities to criminal liability, including organizing meetings where alternative policy ideas are discussed.
"By classifying international organisations as ’foreigners’ without qualification, the bill subjects them to all of its substantive restrictions, registration requirements, financial reporting obligations, and criminal penalties," the Bank stated.
The World Bank is a major donor to Uganda, with a current project portfolio of about $4.57 billion in the country. The bank halted new lending to Uganda in 2023 after the government enacted an anti-homosexuality law but resumed funding two years later following agreed compromises.
Punishments under the proposed sovereignty law include fines of up to 4 billion Ugandan shillings ($1.08 million) and prison sentences of up to 20 years.
The bill, currently before a parliamentary committee, has drawn criticism from opposition politicians, non-governmental organizations and commercial banks, who say it would restrict the flow of legitimate funds into the country.
Museveni has been in power since 1986.
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