The Sovereignty Bill’s Achilles heel: an invalid certificate of financial implications.
By Dr. Sarah Bireete
The Attorney General has significantly amended the controversial Protection of Sovereignty Bill, but no amount of redrafting can heal the Achilles heel of the Bill: the Certificate of Financial Implications that accompanied it into Parliament does not comply with the law. The Bill is therefore invalid.
What is a Certificate of Financial Implications, and why does it matter?
Before any Bill can be introduced in Parliament, the law requires it to be accompanied by a Certificate of Financial Implications, a document issued by the Minister of Finance that tells Parliament what the Bill will cost, what revenue it might generate, and how it will affect the economy. This requirement is in the Public Finance Management Act (PFMA) and reinforced by the Guidelines for Financial Clearance issued by the Ministry of Finance.
The certificate is the essential mechanism by which Government shows to Parliament, and by extension, the country, that a Bill’s financial consequences have been considered and can be met. Without it, Parliament is legislating blind.
What must a valid certificate have?
The PFMA requires the certificate to do three things: show the estimates of revenue and expenditure over at least two years and show the impact of the Bill on the economy. The Guidelines then prescribe a rigorous analytical framework to make the economic impact assessment.
What is wrong with the certificate for the Sovereignty Bill?
The certificate issued for the Sovereignty Bill falls short of these requirements in every respect.
The certificate shows an added financial burden of Shs 29 billion but presents this as a single aggregate sum. There is no itemization, no underlying method, no time frame, and no distinction between capital and recurrent expenditure. This is precisely the kind of opaque lump-sum presentation that the Guidelines were designed to prevent.
The certificate falsely claims that the Bill “is not anticipated to directly generate revenue to Government” yet the Bill creates multiple revenue streams: registration and renewal fees, fines, forfeiture of funds, and penalties payable to the Consolidated Fund. In fact, the Bill has the highest fines in Uganda’s legislative history. The Uganda Law Society showed all of these revenue mechanisms and accused the certificate of presenting “only the expenditure side of the fiscal equation.”
Furthermore, the description of the Bill contained in the certificate did not match the actual contents of the Bill and included several concepts that do not appear anywhere in the Bill itself raising the question of whether the certificate was prepared with reference to the correct text at all.
Most critically, the certificate has no economic impact assessment whatsoever. Its treatment of the Bill’s impact on the economy is limited to a single paragraph asserting that the Bill will “strengthen Uganda’s policy autonomy and national security architecture.” This is not an economic impact assessment. It does not engage with any of the macroeconomic consequences that the Bank of Uganda later showed in devastating detail.
What did the Bank of Uganda say?
The Bank of Uganda’s technical assessment warned that the Bill was an economic disaster a voluntary shock that could destabilize the balance of payments and lead to a massive depreciation of the shilling. The Bank warned of the risk of FATF grey-listing, loss of correspondent banking relationships, and the criminalization of critical economic research through the Bill’s “economic sabotage” offense, asking pointedly whether the Bank’s own publications on inflation or currency depreciation could be prosecuted. The Bank warned that the Bill risked “reversing three decades of successful financial development.”
None of these concerns, not one, appears in the certificate. The Guidelines require stakeholder consultation, economic impact modelling, risk assessment, and distributional analysis. Had any of these steps been taken, the Bank of Uganda’s concerns would have been identified, quantified, and disclosed to Parliament before the Bill went ahead. They were not.
What is the legal consequence?
A document that does not satisfy any of the substantive requirements of the PFMA is not a “certificate of financial implications” within the meaning of the statute. It is a non-certificate, a document that bears the label but lacks the substance. A Bill that proceeds in such circumstances contravenes a mandatory statutory requirement and an essential step in the legislative process.
There is a counterargument. In Fox Odoi-Oywelowo v Attorney General, the Constitutional Court held that the economic impact requirement “does not go to the root of the certificate” and that non-compliance with it would not vitiate the constitutionality of the resultant Act. The Court characterized the certificate’s function as being primarily concerned with budgetary compliance. The Court also relied on a deeming provision in the statute, which provides that a certificate is deemed issued after 60 days even if none has been produced, to reason that if total absence of a certificate does not vitiate a Bill, partial non-compliance cannot either.
In Male Mabirizi v Attorney General, while the Supreme Court agreed with the arguments on the importance of the certificate, it resolved the problem by striking out only those amendments that were not supported by a valid certificate.
These arguments are distinguishable. The Bill in issue in Fox Odoi concerned homosexuality, and Bill in Male Mabirizi concerned age limits for the presidency. In Fox Odoi, the certificate deficiency was limited to the omission of an economic impact assessment for a law whose fiscal consequences were genuinely minimal. The Sovereignty Bill is a different kettle of fish altogether precisely because of its potential economic impact. Its certificate also fails on nearly every statutory requirement: wrong concept of the Bill, no itemized costing, no revenue identification, factually incorrect revenue assessment, no economic impact analysis, no stakeholder consultation, and no risk assessment. A certificate deficient in every respect cannot be equated with one that merely omits a single subsidiary element.
Moreover, the deeming provision addresses the mischief of executive inaction, preventing the Minister from vetoing a Bill by simply refusing to issue a certificate. It does not authorize the Minister to issue a certificate devoid of content and thereby circumvent the statutory requirements that Parliament itself enacted.
What should happen now?
The Bill is scheduled for plenary debate. But the certificate accompanying it has still not been reissued, corrected, or supplemented. In typical fashion for public officers, Minister Lugoloobi, has ignored his constitutional duty of accountability to the people and left the Uganda Law Society letter still unanswered.
Parliament is being asked to legislate on a Bill with macroeconomic consequences unknown, unquantified even after the stark warnings of the central bank.
Even the amendments now proposed by the Attorney General must be subjected to a fresh review of financial implications. Amendments that alter the regulatory architecture inevitably change the fiscal equation, and Parliament cannot carefully consider those amendments without knowing their cost.
Parliament should halt further consideration of this Bill until a certificate is issued that complies with the PFMA and the Guidelines, one that itemizes costs, quantifies revenue, assesses economic impact, consults the Bank of Uganda and other stakeholders, and discloses the risks that Parliament needs to understand before it votes.
The legal archers stand ready and aplenty with their bows primed, should this Achilles of a Bill attempt to enter the law books. Must history repeat itself?
Dr. Sarah Bireete is the Executive Director of Center for Constitutional Governance.
