Ministerial approvals on foreign funds will slow transactions, hurt diaspora remittances  — Fintechs

By Dedan Kimathi, Sarah Nabakooza and Nelson Mandela Muhoozi

KAMPALA - Payment service system providers have opposed the Protection of National Sovereignty Bill, 2026.

The Bill mooted by internal affairs minister Maj. Gen (rtd) Kahinda Otafiire is currently undergoing scrutiny in Parliament's joint defence and legal committees. The latter are respectively led by Wilson Kajwengye (Nyabushozi County, NRM) and Stephen Bakka Mugabi (Bukhooli North, NRM).

Led by Ronald Azairwe, the vice-president of their association, the providers presented their reservations on April 28, 2026. Azairwe is also the managing director of Pegasus Technologies.

About payment service system

A payment service system is a platform that enables businesses to securely process electronic money transfers, cash deposits, withdrawals and payments. Examples, include MTN MoMo, Airtel Money, PayWay Uganda and PesaPal.

The above are regulated under the National Payment Systems Act, 2020 and supervised by Bank of Uganda under Section 4 of the same law.

Under Section 13(1)(f), the Bank of Uganda (BOU) may, in writing, revoke or suspend a licensee where it believes the entity is operating a payment service system that endangers the stability of Uganda’s financial system.

Concerns of Clause 22

Submitting Tuesday, Azairwe called for an amendment of Clause 22 of the Protection of Sovereignty Bill, which bars persons or agent of a foreigner from receiving foreign financial support exceeding shillings 400 million (20,000 currency points) in a 12-month period without prior approval of the Internal Affairs Minister.

With funds received in error subject to forfeiture to the state.

“Most of the money that we use for infrastructure, especially, say MTN or Airtel for cyber security, technology upgrades, liquidity management, sometimes for prefunding of these remittances. All this money is way in excess of the prescribed sh400 million which is really very small. So, we find that we are going to be required nearly every day to have to go and report to the Minister of Internal Affairs when such monies are coming in,” he said.

“This additional requirement for Ministerial approval for any amount in excess of that will introduce additional regulatory approval requirements, again at the discretion of the Minister. Which is not tenable for us in our operations,” Azairwe said.

Fears of disrupted foreign remittances

Which in his view would lead to severe implications for in and out bound diaspora remittances. Adding that requirement that supervised institutions cannot disperse funds without the proof of ministerial consent under Clause 25 has the capacity to freeze cross border remittances.

Clause 25(1)(a) stipulates that a supervised institution shall not pay out any money to an agent of a foreigner without the agent of a foreigner declaring the source of funds.  

“Somebody sending you money from the U.K (United Kingdom) or U.S (United States) arrives on your mobile wallet in real time. If we have to pose that to seek for ministerial approval then that totally disrupts our operations and takes us back to the days when someone had to go through a forex bureau to sign or give a code to get their money out,” he said.

Trade Unions speak out

Shortly after the stepped out, MPs interfaced with a delegation from National Organisation of Trade Unions (NOTU) which was led by Secretary General Richard Bigirwa. It also included Twaha Ssempebwa, treasurer general Richard Matukhu, Natasha Sharon, Christine Chandia.

NOTU is a creature of the 1973 Amin decree and later Labour Unions Act, 2006 (Cap 228). It comprises 2.7 million subscribers and is a member-based organisation with 38 affiliates across all the trade such as teachers and doctors.

Submitting, Bigirwa said the Bill, as it stands, is quite unfair to the workers of the country. Largely because it could curtail their rights to freedom of association. Saying at worst, the mover should make amends and exclude them from those who will be affected by the clampdown.

“There is something to do with disruptive activities. Under the Constitution, workers are given freedom and the right to strike. So, we are wondering if this bill comes into law, that we shall not have the freedom of speech including freedom to strike, to withdraw labor according to the law. Number two, we would like to point out very clearly that in the Public Order Management Act we were exempted from that bill. Under Section 4(c) we were exempted,” Bigirwa implored.

Section 3 and 4(2) (c) of POMA gives the Inspector General of Police powers to regulate the conduct of all public meetings in accordance with the law with the exception of a meeting of members of a trade union.