Uganda's parliament passed legislation to curb alleged foreign influence after scaling back proposed restrictions on funding from abroad that the central bank governor said risked "economic disaster".

The proposal, entitled "The Protection of Sovereignty Bill”, was adopted late on Tuesday and now awaits the signature of President Yoweri Museveni.   

Museveni, who has been in power since 1986, and allies in the ruling party regularly decry outside influence in Uganda, accusing domestic political rivals of receiving funding from abroad and pushing foreign agendas such as LGBTQ rights.

Several Ugandan opposition parties have traditionally received some of their funding from outside ​the country.

The law, which calls for penalties of up to 10 years in prison for violations of its terms, bans anyone working on behalf of foreign interests from developing or implementing policy without the approval of the government.

It also criminalises the promotion of the "interests of a foreigner against the interests of Uganda".

Rights groups have said that such broad language would allow the government to criminalise just about any form of political opposition. The government has accused critics of exaggerating the bill's impact. 

FINAL LEGISLATION SCALES BACK FOREIGN FUNDING DISCLOSURE RULES

The final legislation, however, softened earlier language that had drawn concern from economic actors.

For example, a provision requiring any Ugandan receiving money from abroad to register as a foreign agent and disclose incoming funds was amended to apply only to people receiving funds for political purposes that advance foreign interests.

Remittances from Ugandans living abroad are an important source of foreign exchange for the east Africa nation.

Central Bank Governor ​Michael Atingi-Ego had warned last week that the legislation would diminish financial flows into the country and risk running down foreign exchange reserves - a situation he called "economic disaster for our country". 

The World Bank also said last month that the bill could expose to criminal liability a broad range of its "routine development activities", including meetings in which alternative policy ideas are discussed.

It was not immediately clear to what extent parliament's amendments had addressed those concerns.

The World Bank halted new lending to Uganda in 2023 after the government enacted a harsh anti-homosexuality law but resumed funding two ​years later after authorities agreed to some compromises.