Uganda's non-governmental organisation sector is facing mounting pressure from tightened banking compliance rules, regulatory enforcement and declining donor support that is leaving many organisations struggling to sustain operations. The National Bureau for NGOs said compliance among the sector had improved to 62.4% by the time of its latest assessment, up from 26.8% before 2016, but a substantial proportion of organisations still fail to meet their legal obligations. Dr Stephen Okello, secretary of the National Bureau for NGOs under the Ministry of Internal Affairs, said that compliance had become a cross-cutting institutional responsibility rather than simply a matter of registering and renewing permits. Organisations must now meet tax and employment obligations, comply with data protection requirements, maintain financial accountability and observe immigration rules and the governance provisions in their constitutions.
Banks have tightened scrutiny of NGO transactions and accounts because compliance gaps create financial and regulatory risks. Alexander Mayanja, deputy secretary of the Uganda Bankers Association, said some NGOs had incomplete customer information, expired permits and inadequate documentation relating to donors and governing boards. Financial institutions are required to comply with anti-money laundering and counter-terrorism financing obligations, and failure to meet these requirements could expose them to serious consequences given their dependence on international correspondent banks and payment networks. Mayanja warned that organisations receiving substantial transfers without notifying their banks or updating information about donors, leadership and operations risk transaction processing delays and possible account restrictions.
Governance weaknesses within organisations compound the compliance challenge. The NGO Bureau has raised concerns about limited understanding of constitutions and governing documents, with about 95% of NGOs not adequately familiar with their own constitutions, which establish board responsibilities and decision-making procedures. Such gaps can trigger disputes between founders and boards, weaken financial controls and expose organisations to operational and legal risks. The challenge is particularly acute for smaller, community-based organisations that may lack resources to employ accountants, lawyers and dedicated compliance officers, even though the law imposes the same obligations on all NGOs regardless of size.
The sector is also being destabilised by the suspension of some organisations over alleged activities prejudicial to national security. Yona Wanjala, executive director of Civic Advisory Hub, said the suspensions had created uncertainty across the sector, forcing some organisations to halt operations and terminate staff while awaiting decisions on their cases. He called for fair hearings, transparent investigations and clear timelines for resolving cases, warning that prolonged suspensions risk destroying institutional capacity and discouraging other organisations from undertaking legitimate civil society activities.
Declining donor support is compounding these pressures. Wanjala cited the withdrawal of United States Agency for International Development support under the Trump administration and the departure of other funding partners, including the Democratic Governance Facility, as developments placing additional pressure on civil society organisations. With fewer resources available, NGOs must meet increasingly complex regulatory requirements while retaining staff and sustaining programmes. The government is reviewing the NGO Act and national NGO policy, creating an opportunity to address weaknesses in the regulatory framework, but effectiveness will depend on whether organisations can understand their obligations, regulators apply rules fairly and enforcement decisions are communicated transparently.