Uganda’s proposed Protection of Sovereignty Bill has ignited a growing debate across the country’s tourism and investment landscape with industry players warning that, while the law seeks to shield national interests, its current form could unintentionally weaken one of the country’s most important economic sectors.
At its core, the Bill aims to protect Uganda from undue foreign influence by regulating foreign funding, tightening oversight of external actors and asserting stronger state control over strategic sectors.
But, as consultations intensify, tourism stakeholders argue that some of its provisions, particularly those affecting foreign capital, partnerships and diaspora engagement, risk sending the wrong signal to investors at a time when regional competition is intensifying.
Investment concerns
Among the most contentious elements of the Bill are provisions that impose stricter controls on foreign funding and broaden the definition of who qualifies as a “foreigner”. In its current interpretation, this definition could extend beyond political actors to include foreign investors, international partners and even Ugandans living abroad.
For tourism, a sector heavily reliant on cross-border partnerships, this raises immediate red flags.
“Tourism is fundamentally global,” said Barry Clemens, CEO of Hospitality EQ and co-founder of Fontis Hospitality Group, which recently launched in Uganda. “You cannot separate it from international capital, markets and expertise.”
Large-scale tourism developments often require millions of dollars in upfront investment. These projects typically depend on a mix of foreign direct investment, international financing and partnerships with global operators. If such transactions fall under restrictive thresholds or require extensive state approvals, investors may reconsider their commitments.
“The risk is not just regulation but uncertainty,” said Clemens. “Investors are highly sensitive to policy signals. If there is ambiguity around ownership structures, capital movement or operational freedoms, decisions are delayed or redirected.”
The segments most exposed to the proposed changes are those that Uganda has been actively trying to grow: high-value, low-volume tourism products.
Luxury lodges, international hotel brands and mixed-use developments are particularly dependent on foreign capital and long-term investment horizons. These projects also rely on global booking platforms, marketing networks and international tour operators to reach high-spending travellers.
“Tourism is perception-driven,” Clemens added. “Even the suggestion of tighter controls can affect how a destination is viewed globally.”
Diaspora status questioned
Another area of concern is the Bill’s potential classification of diaspora Ugandans as “foreigners”. This provision has sparked strong reactions from stakeholders who view the diaspora as a critical pillar of the tourism economy.
“To treat diaspora investors as external actors requiring state clearance risks alienating one of Uganda’s most committed investor groups,” said Isa Kato, Vice President of the Uganda Tourism Association.
In response to these concerns, tourism and private-sector stakeholders have formally submitted proposals to government, calling for targeted revisions to the Bill. Among the key recommendations are clearer distinctions between political interference and commercial investment as well as exemptions or special considerations for sectors like tourism that depend on international collaboration.
Stakeholders are also pushing for more precise definitions and thresholds to avoid capturing routine business activities under restrictive provisions. There are calls to explicitly recognise diaspora Ugandans as partners in development rather than categorising them alongside foreign entities.
“Clarity is critical,” said Kato. “Policy must inspire confidence, not fear.”
Despite the concerns, stakeholders acknowledge the legitimacy of the Bill’s underlying objective. Protecting national sovereignty and ensuring that foreign influence does not undermine domestic priorities is a goal shared by many countries. The challenge, they argue, lies in achieving this without isolating the economy.
“Protecting sovereignty should not mean closing the door to the world,” said Kato. “It should mean engaging on stronger, more strategic terms.”
