A proposal to introduce a new NGO Funding Act in Uganda has ignited a wide-ranging public and political debate, sparking renewed scrutiny of the role of non-governmental organisations, their reliance on foreign donors, and allegations of serious misconduct within parts of the sector.
The debate follows a proposal by Nyanzi Martin Luther, who has petitioned Uganda’s Twelfth Parliament to consider legislation that would shift funding for community-based non-governmental organisations from foreign donors to direct government support. Nyanzi questioned why local organisations receive tax exemptions but no direct funding, despite operating within communities and contributing to the local tax base.
“We pay taxes locally and still seek funding from the EU, but it’s difficult to get recognised,” Nyanzi argued, calling for a funding framework that strengthens domestic support for grassroots civil society organisations.
Existing Law and Heightened Scrutiny
Uganda’s NGO sector is governed by the Non-Governmental Organisations Act of 2016, which regulates registration, operations, and funding. While the law aims to provide an enabling environment for civil society, it also enforces strict oversight, particularly to prevent foreign interference in domestic affairs.
In the run-up to the 2026 general elections, government authorities repeatedly cautioned NGOs against overreliance on foreign donors and encouraged compliance with Section 46 of the Act, which promotes self-sufficiency.
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In November 2024, authorities suspended 54 NGOs for non-compliance, citing expired permits and operational irregularities. Government officials later said engagements were ongoing to resolve the issues ahead of the elections.
In January 2026, reports indicated that Nyanzi formally requested that Parliament enact legislation to reduce dependence on foreign aid and strengthen locally driven civil society initiatives.
Parliamentary Reactions: Support and Caution
The proposal has drawn mixed reactions from lawmakers.
Hon. Elias Nalukoola, Member of Parliament for Kawempe North and a senior advocate, said NGOs play a complementary role to the government and should not be viewed as adversaries.
“NGOs fill gaps in service delivery. Government support could enhance sustainability and local ownership. It should be about collaboration, not dependency,” Nalukoola said, adding that strategic funding could help align NGO activities with national development priorities.
The government has allocated Ush2.088 billion in the 2026/27 financial year toward NGO regulation, reflecting increased oversight rather than direct operational financing.
However, the Leader of the Opposition (LoP) warned that government support would be unlikely unless a clear distinction is made between non-governmental organisations (NGOs) and community-based organisations (CBOs).
According to the opposition, CBOs operate at the grassroots level and should not be treated in the same category as nationally or internationally linked NGOs. The LoP argued that separating the two is necessary to protect public funds and prevent politicisation of community initiatives.
Public Outcry and Trafficking Allegations
Beyond Parliament, the proposal has triggered strong public reactions, including serious allegations of child trafficking within the NGO sector.
A verified social media user and athletics coach alleged that some NGOs are involved in child trafficking networks, claiming that investigations would reveal “evil, established systems.” He further questioned the sustainability of NGOs amid reduced donor funding and accused parts of the sector of exploiting vulnerable children.
The remarks prompted shock from other users, with one responding, “I’m speechless.”
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Other commentators linked the debate to broader regional and global concerns. References were made to poverty-driven child exploitation in Kenya’s Kilifi region and alleged aid diversion in Somalia, where United Nations audits have reportedly flagged large-scale misuse of humanitarian funds.
Additional claims accused international donors and institutions, including USAID, the European Union, the United Nations, and the International Criminal Court, of shielding NGOs from scrutiny — allegations that remain unsubstantiated.
A Sector Under Pressure
While no official investigations have confirmed the allegations raised online, the debate has underscored persistent mistrust of NGOs and growing calls for transparency, accountability, and stronger regulation.
Civil society organisations remain central to Uganda’s health, education, humanitarian relief, and governance sectors. However, they now face increasing regulatory pressure, declining foreign donor support, and heightened public scepticism.
As Uganda’s Twelfth Parliament considers potential changes to the NGO funding framework, the path forward will likely depend on whether lawmakers can clearly distinguish NGOs from community-based organisations and establish safeguards that protect public funds while preserving civil society’s independence.
For now, the debate highlights a broader national challenge: how Uganda can balance sovereignty, accountability, and development needs while maintaining trust in institutions that serve its most vulnerable communities.
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