Pioneer Global Regulation of AI


Is Artificial Intelligence (AI) the new oil? AI data has become an essential resource to businesses and
economies, some calling it “the ‘new oil’ to illustrate the tremendous opportunities it creates in terms of how it eases and drives efficiency, innovation of solutions, private and public services.” 2 AI is a momentous human achievement, and a realistic and pivotal business opportunity. Messrs. Kasirye, Byaruhanga & Co. Advocates3 (KB) is a proud member of Mackrell International (MI), a
global network of independent law firms. Mackrell International has 27 Practice Groups of cross border legal insight and excellence, which form an important part of its legal practice ecosystem, and practice group three (3) is the Artificial Intelligence Practice Group.

“Collectively, the group understands the practical and regulatory challenges posed by AI technologies and offers appropriate counsel to clients navigating a new and complex landscape, including issues related to data privacy, intellectual property protection, algorithmic
transparency, product liability and accountability, ethics, and regulatory compliance. We stay abreast of the latest developments in AI law, regulation, and industry trends, enabling us to offer
business strategies and practical advice to our clients.” – Mackrell International’s AI Insight Group.

Artificial Intelligence, a technological discipline that originally was so much a distant aim of computer science, focuses on creating intelligent tech or machines that can perform tasks that ordinarily require human intelligence. However, “AI does not have to confine itself to methods that are biologically human observable.” 4 In a simplistic explanation, AI involves the development of intelligent machines or systems that can simulate many kinds of cognitive processes of humans, animals, birds and other species or creatures, in the forms of movement, reasoning and decision making, answering, problem-solving, natural language processing, entertainment, vision, etc.

The main categories of AI a business can thrive in are; text, visual, interactive, and analytic AI. The form of business AI takes two-fold; the first is simple artificial intelligence tools designed to perform simplistic and specific tasks such as voice assistants, conversational assistants, image recognition systems, and self-driving automobiles, whilst the second is cognitive technology, which aims to highly replicate human-level intelligence, machines built and trained to understand, reason, learn, and apply human behavioral repertoires and knowledge across various domains. These include; education, healthcare, finance, transportation, manufacturing, customer service, medical practice, law practice, and many other areas.

Although it appears that AI has potential to revolutionize various aspects of our lives, it raises several legal, ethical, social, and sustainability questions, human and civil rights shortfalls such as privacy concerns, discrimination, job displacement, and political bias. For example, so far, AI usage has shown incidents of algorithmic discrimination;

“Algorithmic discrimination occurs when automated systems contribute to unjustified different treatment or impact disfavoring people based on their race, color, ethnicity, sex (including pregnancy, childbirth, and related medical conditions, gender identity, intersex status, and sexual orientation), religion, age,
national origin, disability, veteran status, genetic information, or any other classification protected by law.”

As society and organizations are swiftly switching to automated workflows and data driven decision making, KB’s Patrick Lubwama, a listed member of MI’s ‘Artificial-Intelligence-Insight-Specialist-Group’6, is here to help clients and you the reader, harness the suitability, the power and scale of AI technological acceleration while navigating and managing the ethical, regulatory, and legal complexities7 associated with this transformative technology. Almost entirely, cognitive AI technology is so far assumed to have wide-reaching risks and costly effects on business and society, and on that note, in March this year some industry stakeholders called for AI development pause. This is why our MI-AI Insight Group renders assistance to help you responsibly structure, develop, adopt and use AI tech, guide you through negotiating AI-related contracts and licenses, and addressing potential legal risks involved and disputes management, and will also find amicable, and best solutions for you. Altogether, our efforts mirror the current industrial moves that form the foundation for the future of AI.

It is safe to say that AI should impress as a human assistant rather than being a target of competition. For
this article, among other aspects, I will share some highlights on a key concept, ‘Sustainability of AI’. Is AI
sustainable for business? Our practice group intends to share insights on AI in global business to keep our clients, colleagues, and the interested market updated on the latest legal and regulatory developments in this field. We also bring together legal and industry specialists from within and outside MI’s global network to stay connected and at the forefront of AI-related developments.
‘Tech leaders sign letter calling for a six months moratorium ‘Pause’ to Artificial Intelligence’ VOA news, March 30th 2023. It seemed difficult and unlikely that consensus would be reached by any or all stakeholders for this industrial proposal for many reasons.

Sustainability of Business-Grade AI

Business-Grade AI aims at powering business strategies, and resolving the real-world business issues. Sustainability is a key concept in business-grade AI. Sustainable AI is “the use of artificial intelligence systems that operate in ways contingent on sustainable-business-practices”
, and a stable circular economy. Today, sustainability is the number one decisive factor for investors, consumers, and various stakeholders in determining suitability of an investment, choice of product, and regulatory accommodation and decisions. Sustainability recognizes interdependence between the current and long-term environmental care, social wellbeing, and circular economic growth aspects. It follows, therefore, that AI tech capable of productively, safely, and responsibly assisting, facilitating, and interacting with humans, society and our environment should qualify to be sustainable AI. What do the stakeholders say about this?

“AI models require human beings to keep feeding them, for these AI models to get better, so unless there is cooperation, you can only do so much to cannibalize your own data source, when these AI models start to hurt the very people who generate the data that it feeds on — the artists — it’s destroying its own future, so really, when you think about it, it is in the best interest of AI models and model creators to help preserve these industries so that there is a sustainable cycle of creativity and improvement for the models.”

“We’re developing software, middleware, and hardware to bring frictionless, cloud-native development and use of foundation models to enterprise AI.” – IBM

“Earth’s climate is changing…IBM’s new geospatial foundation model could help track and adapt to a new landscape…built from IBM’s collaboration with NASA, the watsonx.ai model is designed to convert satellite data into high-resolution maps of floods, fires, and other landscape changes to reveal our planet’s past and hint at its future…the ability to accurately map flooding events can be key to not only protecting people and property now but steering development to less-risky areas in the future.”

“While many of the concerns addressed in this framework derive from the use of AI, the technical capabilities, and specific definitions of such systems, change with the speed of innovation, and the potential harms of their use occur even with less technologically sophisticated tools. Thus, this framework uses a two-part test to determine what systems are in scope. This framework applies to (1) automated systems that (2) have the potential to meaningfully impact the Americans public’s
rights, opportunities, or access to critical resources or services. These rights, opportunities, or access to critical resources or services should be enjoyed equally and be fully protected regardless of the changing role that automated systems may play in our lives.”

Without a doubt, artificial-intelligence13 is the staple of this era, promising to redefine our society and make our lives, environment, and methods of work, and business better. It is a huge human achievement though some corners of society ‘didn’t’ and others still ‘haven’t’ entirely appreciated its ascendancy over our traditional ways of life and work, generally. I wish to relay an interesting example of two chess grandmasters who played the chess computer game IBM’s DeepBlue-199714, and agreed that ‘it was like a wall coming at you’. Gary Kasparov called it an ‘alien opponent’ and later belittled it to just ‘as intelligent as your alarm clock’. DeepBlue, is a chess computer that was trained by human experts and built to an absolute expert level, the first computer to win a competitive game in a match against a reigning world champion under real regular time controls, and registered as a world record of remarkable achievement.

DeepBlue made a respected world record by beating celebrated world chess champion Gary Kasparov. What is more interesting about this AI achievement is that DeepBlue’s computer system operated solely upon commands finetuned by both computer and chess experts. It was a fine progressive interaction between technology and human nature by DeepBlue, then a state-of-the-art AI model. Today, we are boasting advanced chess models like the brilliant Leela Chess Zero, which contrary to the DeepBlue, is an AI neural network chess computer built to solely rely on its own logic. As of 2023, the best advanced AI breakthroughs are OpenAI’s ChatGPT-3 (its iteration GPT-4 was released in March this year), Google’s or DeepMind’s AlphaGo, IBM’s Watson, the sandbox Minecraft bot, among others.

No wonder, there exists real fear of AI outcompeting humans in various aspects of our lives. For example, ChatGPT has already significantly altered (but not replaced) jobs in real estate industry, a business challenge common in many sectors today.

“In a city of a very near future, a citizen looking to buy a home will simply explain their requirements to a property AI-agent or assistant, which will orchestrate the entire selection and buying process without involving a human property agent and the commission commanded by human agents.”

“The large majority of independent artists make their living through commissioned works, and it is absolutely essential for them to keep posting samples of their art but the websites they post their work on are being scraped by AI models in order to learn and then mimic that particular style…artists are literally being replaced by models that have been trained on their own work…I and my team have designed a new tool called Glaze, which aims to prevent AI models from being able to learn a particular artist’s style…if an artist wants to put a creation online without the threat of an image generator copying their style, they can simply upload it to Glaze first and choose an art style different from their own…the software then makes mathematical changes to the artist’s work on a pixel level so that it looks different to a computer…to the human eye, the Glaze-d image looks no different from the original, but an AI model will read it as something completely different, rendering it useless as an effective piece of training data.”

As a business strategist and an anti-fraud enthusiast, I landed on an interesting study about nanotech in combination with different aspects of AI. A real-time connection between the brain and cloud, which can read brain waves of criminal suspects. A “Human Brain/Cloud Interface” 17 (B/CI), which connects the human brain to a cloud computing network system. In terms of business development, this tremendous tech achievement is crucial for efficiently facilitating real-time business data analyses, processes, and operations, will quicken identification and selection of scattered business opportunities around the world, proficiently help to solve cross-border business challenges, and simplify business administration, decision making, and profiting.

“This real-time connection between the brain and the cloud would include neural nanobots that monitor and control the neural connections, making it possible to connect to vast data networks
and other humans simply by thinking about it, and knowledge would be acquired by downloading directly to the brain. The system mediated by neural nanorobotics could empower individuals with
instantaneous access to all cumulative human knowledge available in the cloud, while significantly improving human learning capacities and intelligence.”


That said, although AI versus human-IQ is a big debate, what I understand to be the real concern of this AI-predominant era is that “human genes can pre-dispose, but they don’t predetermine” 19 whereas, AI is interestingly proving to yield towards at least both pre-determination and pre-disposition of any results including those beyond imagination, call it ‘superintelligence’. 20 There is a premature concern in some corners about AI’s apparent negative impact on the human job market and opportunities, however, as I said before, some business quarters have already condemned AI development to closure.

So, what then? We are just in the middle of the AI adoption and adaptation stage, and already past making the AI choice, or the argument of suitability and democratization of AI. Particularly about, which AI model is more suitable for a given business or task, such as a model developed to run upon rules and commands of human experts or that which is created by human experts to act, react and perform using its logic by naturally making predictions and decisions without being
programmed to do so.

Technology by its nature has a universal impact and has less of the component of retraction, and I agree that it is crucial to escalate AI regulation. According to a study in the oil and gas sector, it is estimated that 40% of existing human jobs are susceptible to automation in a future fossil-free energy world.21 Progressive business-grade AI should not be at the cost of any human right and
opportunity, or should not put society and our environment at sufferance. Sustainable AI must come with a universal guarantee of; continuous income for human labor, health for mothers at birth and new borns, affordable clean water and energy, education for children, and a healthy circular economy. While sustaining a healthy working environment, proper regulation should
require employers embracing AI tools to conduct AI bias and discrimination audits to identify any errors or biases, to build confidence, trust in workplace-AI-tools, and eliminate or mitigate possible associated risks.

Examples of such automated workplace-AI-tools are, screening tools for CVs or resumes and tools that rank candidates for interviewing, employment, promotion or even for disciplinary purposes.
As we embrace AI, there is an automatic responsibility and requirement (not just need) to deal with the challenges that come with AI, be it the skilled labor gap, costly development cycle, adoption and adaptation to AI and change management, safety, security, and regulatory concerns among others.

State of AI Regulation

Undeniably, there is enormous increase in AI tech creation and use around the world, though coupled with a growing awareness of its misuse. Take a simple example of someone created an AI tech tool that can speak to mimic your exact voice in your language to say, “mother, I have
been kidnapped and my kidnappers are asking for a ransom of USD$10,000.” Considering that more convincing information is used and communicated to “your mother” in the scam, chances are that she may end up being robbed of USD$10,000. Here, the AI tech tool is used with a subliminal objective or a criminal mind. Others create or use AI tech for other societal harms such as discrimination, and violence.

Legally, and anywhere around the world at least for now, generative AI models or tech including image generators, music generators, text chatbots, and more, are not considered authors of anything they produce as a result of their mechanism or own logic. It is argued that the work
these AI systems produce culminates from the genius of humans and human-made effort, and which effort is portrayed in the work. Several legal questions arise in such circumstances. What is the legal standard for creative work that is the result of a collaboration between a human
and an AI machine? Or, what becomes of novel work that is created out of the sole logic of an AI model? Or, who is liable or responsible for a driverless car accident? Currently, the answers vary, and remedies may not be necessarily adequate, satisfactory, or available at all.

In order to formulate effective global AI regulation, we can start with an International AI Convention, an AI model law to set in play a global standard framework for responsible AI, to guarantee, protect, and provide for rights of all AI stakeholders including, developers, funders, investors, traders, users, consumers, researchers, facilitators, regulators, policy makers, dispute resolution service providers, and other line stakeholders.

Today, for example, there is neither a unified global standard for AI copyright nor a settled and protective one. In the US, what is currently passing as the rule relating to AI copyright protection is that no copyright protection is given to works created by non-humans, and that includes AI machines. Does this mean that the product of an AI model cannot be copyrighted? I say it depends.

“…If a machine and a human work together, but you can separate what each of them has done, then copyright will only focus on the human part… If the human and machine’s contributions are more intertwined, a work’s eligibility for copyright depends on how much control or influence the human author had on the machine’s outputs… It really needs to be an authorial kind of contribution, and in that case, the fact that you worked with a machine would not exclude copyright protection.”

The United States Copyright Office, in September 2022, put the above position to test in two phases with different outcomes. First, the office granted copyright to (historically the world’s first-ever registered graphic AI work) the graphic novel ‘Zarya-of-the-Dawn’ created by Midjourney, an AI tech generator of text-to-image content.

However, shortly after the copyright registration, the office reviewed its copyright registration decision, and partially canceled the copyright protection. But why could this be? The reasoning for the office’s decision was that during its deliberations for registration of the work, the
office did not smartly consider the traditional element of ‘human authorship’, that the work had ‘non-human authorship’. Therefore, what remained protected were the training data sets and prompts used to generate the unpredictable graphic outputs, and the book’s text particularly the ‘selection, coordination, and assembly’ of its written and visual elements. What this meant was that
the images generated by Midjourney, the AI tech, did not get protection because they are not a human authored product. The office added, with emphasis that even the entire editing made by the author, Kashtanova, on the images generated by Midjourney, was (in their opinion)
‘too small, negligible, and imperceptible’ to qualify the work for copyright protection. The decision has so far set a policy standard on AI-human collaborative work in the US.

What this simply means is that the term ‘author’ does not extend to non-humans. The decision also signifies that if a person prompts a machine by typing a text, and the machine in reaction generates a written text, graphic, or visual, or musical work, the resultant work being a creation
of a non-human, is therefore not the subject of copyright protection.

“Until now, when a purchaser seeks a new image ‘in the style’ of a given artist, they must pay to commission or license an original image from that artist…now, those purchasers can use the artist’s works contained in Stable Diffusion along with the artist’s name to generate new works in the artist’s style without compensating the artist at all, the complaint reads…the harm to artists is not hypothetical, works generated by AI image products ‘in the style’ of a particular artist are already sold on the internet, siphoning commissions from the artist’s themselves.”

A key committee of lawmakers in the European Parliament has approved a first-of-its-kind artificial
intelligence regulation, making it closer to becoming law later this year. The approval marks a landmark development in the race among different countries to get their handle on AI, which is evolving with breakneck speed. The proposed law is known as the European AI Act, the first law for AI systems in the West aimed to set the AI standard and formulating harmonized standards other
jurisdictions can borrow a leaf or implement.

The proposal of the EU AI Act will become law once both the Council (representing the 27 EU Member States) and the European Parliament agree on a common version of the text. It provides a copyright framework for text and data training or copying that allows only nonprofits and
universities (not companies) to freely use original work to train models from the internet without consent. In the recently concluded May 2023 US and EU Trade and Technology Council meeting, a resolution was reached that the Council will produce a draft ‘Code of Conduct’ for AI in weeks.

The US White House Office of Science and Technology Policy, published a blueprint for ‘Development, Use and Deployment’ of automated systems, called ‘Blueprint for an AI Bill of Rights’. The Bill, differs from the European AI Act in a significant way. Whereas the proposed EU AI Act is intended to be binding, the Bill of Rights is non-binding.

“Considered together, the five principles and associated practices of the Blueprint for an AI Bill of Rights form an overlapping set of backstops against potential harms. This purposefully overlapping framework, when taken as a whole, forms a blueprint to help protect the public from harm. The measures taken to realize the vision set forward in this framework should be proportionate with the extent and nature of the harm, or risk of harm, to people’s rights, opportunities, and access.”

Here below are the five critical principles provided for in the Bill;

Safe and Effective Systems,
Algorithmic Discrimination Protections,
Data Privacy.

Notice and Explanation.
Human Alternatives, Consideration, and Fallback.

To advance the US AI vision, particularly that of President Biden, the White House Office of Science and Technology Policy stated that;

“The five principles should guide the design, use, and deployment of automated systems to protect the American public in the age of artificial intelligence…the Blueprint for an AI Bill of Rights is a guide for a society that protects all people from these threats and uses technologies in ways that reinforce our highest values…responding to the experiences of the American public, and informed by insights from researchers, technologists, advocates, journalists, and policymakers, this framework is accompanied by ‘From Principles to Practice’ a handbook for anyone seeking to incorporate these protections into policy and practice, including detailed steps toward actualizing these principles in the technological design process…these principles help provide guidance whenever automated systems can meaningfully impact the public’s rights, opportunities, or access to critical needs.”

On a small scale, on July 5th 2023, the New York City Department of Consumer and Worker Protection shall commence enforcement of its newly passed AI bias audit law. According to its section 20-871 a, it shall be unlawful in the city for an employer or an employment agency to use an automated employment decision tool to screen a candidate or employee for an employment decision

  1. Such a tool has been the subject of a bias audit conducted no more than one year prior to the use of such tool; and
  2. A summary of the results of the most recent bias audit of such tool as well as the distribution date of such tool to which such audit applies has been made publicly available on the website of the employer or employment agency prior to the use of such tool.

Section 20-871 b, on Notices, requires that in the City, any employer or employment agency that uses an automated employment decision tool to screen an employee or a
candidate who has applied for a position for employment shall notify each such employee or candidate who resides in the city of the following;

  1. That an automated employment decision tool will be used in connection with the assessment or evaluation of such employee or candidate that resides in the city. Such notice shall be made no less than ten business days before use and allow a candidate to request for an alternative
    selection process or accommodation;
  2. The job qualifications and characteristics that such automated employment decision tool will use in the assessment of such candidate or employee. Such notice shall be made no less than ten business days before use; and
  3. If no such disclosure is made, the source of such data and the employer or employment agency’s data retention policy shall be available upon written request by a candidate or
    employee. Such information shall be provided within thirty days of the written request. Information pursuant to this section shall not be disclosed where such disclosure would
    violate local, state, or federal laws, or interfere with a law enforcement investigation.

The NYC AI bias law also provides for penalties; a civil penalty of USD$500 for a first violation, and each additional violation occurring on the same day as the first violation, and not less than USD$500 not more than USD$1,500 for each subsequent violation. Other jurisdictions can be persuaded to borrow a leaf from this pioneer law to design their own suitable policies and law
to cater for fundamental AI requirements such as AI statutory testing and compliance.

On April 11th 2023, the Cyberspace Administration of China (CAC) developed draft Measures30 or Rules designed to manage how companies develop and provide generative AI products like Midjourney, and OpenAI’s DALL-E and ChatGPT31. The Proposed Rules were out for public
comment through May 10 and are expected to go into effect sometime before the end of 2023. The Rules though not yet implemented, take a risk-based approach to regulating AI, where the obligations for a system are proportionate to the level of risk that it poses.

The rules also specify requirements for creators and providers of so-called “foundation products” such as the said ChatGPT and others, which have become a key concern for
regulators and users around the globe. On a smaller scale, China gazetted its first ever local government regulations in its main tech hub, Shenzhen, for purposes of supercharging and guiding its AI development and privacy sectors. The Regulations encourage local government agencies in Shenzhen to adopt AI methods in business and work environments. The Regulations also
established an ethics committee concerned with making relevant safety guidelines.

In June 2022, Canada tabled its Artificial Intelligence and Data Act (AIDA) as part of Bill C-27, the Digital Charter Implementation Act, 2022, and the AIDA is a great milestone in ensuring that Canadians can trust the digital technologies that they use every day.

In March 2023, Italy banned OpenAI’s ChatGPT citing privacy concerns, and later lifted the ban upon data privacy improvements.

“…ChatGPT is available again for our users in Italy. We are delighted to welcome them back and remain committed to protecting their personal data.” – From an OpenAI spokesperson.

In Africa, there is no specific AI regulation yet, however, a recent UNESCO World Heritage Convention survey recommends fostering legal and regulatory frameworks for AI governance. Africa, one of UNESCO’s global priorities, covers 47 States registered as party to the World
Heritage Convention in the Sub-Saharan Africa.

“The Recommendation on the Ethics of Artificial Intelligence, adopted by all 193 UNESCO Member States in November 2021, also provides an excellent opportunity to consider what regulatory steps countries can consider to ensure that the design, development and application of AI is done in an ethical manner.”

The Indian Commission NITI Aayog has produced working papers on the ‘National Strategy for Artificial Intelligence’ for 2018, 2020, 2021 and 2022 but the government think tank is quickly working towards introducing its AI supervisory authority before putting in place all-round solid AI regulations.

In 2020, Saudi Arabia (SA), started its AI framework by establishing its National Strategy for Data and AI. Latest Developments from there show that SA set in place its own AI ethics standards called the ‘Saudia Arabia AI Ethics Principles 2022’ to help the Kingdom avoid or reduce
technology limitations. In April 2023, SA announced an approval of its most recent AI legislative development, the ‘Amendment to Personal Data Protection Law’ (PDPL) mirroring most of the proposals made by its own Saudi Data & Artificial Intelligence Authority (SDAIA). These
amendments are aligned with some of EU’s international standard general data protection regulations.

On May 12th 2023, the Brazilian Senate announced Bill No.2338/2023 (so far, only the Portuguese version) to regulate AI systems in Brazil. The Bill introduces the rules that make AI systems available in Brazil, establishing rights for individuals affected by AI operations, and further provides for remedies for violations, and information about Brazil’s AI supervising Authority. The Bill specifically requires that AI systems be subjected to preliminary assessments to be conducted by suppliers, for purposes of grading and classifying the AI as either low or high/excessive risk.

The Bill lists AI systems considered to be ‘high risk’, which are categorized in the following services; credit grading, identification of persons, administration of justice, implementation of automobiles,
medical diagnoses, and procedures, decision-making during access to health services, education, employment, and other essential public (and private related) services, evaluation of labor or students, critical infrastructural management, such as telecommunication, traffic control,
electric and water supply facilities and systems, and determination of crime and personality traits.

The Bill also provides for restrictions on using AI for subliminal techniques harmful to safety and health of persons, exploitation of vulnerable groups. On individual rights, the bill provides for various rights, such as the right; to contest and ask for explanations on a result/decision made by the AI systems, to ask for human participation during operation or decision making by the
AI system in certain situations, to be availed information about its functionality, to be protected from discrimination and request for correction of any discriminatory bias, and to disclose or inform an individual whenever an AI system is used.

Other countries have taken a legislative supplementary approach by applying existing laws (with amendments where necessary) while closely following the various global approaches, opting not to rush in with creating entirely new regulations for AI. Switzerland has adopted this approach.
Effort for Regulation – Industry Insights – Best Practices by Major AI Companies: IBM, Shutterstock Inc., Alibaba, Casetext with OpenAI, and MITGAS;

As ever leading, IBM has introduced arguably the best catalogue of AI governance models and tools, for example, Regions Bank, Innocens BV, and Change-Machine. IMB’s ‘Cloud Pak for Data’ is a highly rated AI tool for mortgage approvals (you will find its ‘Loan-Automation-Use-Case’ very interesting), and so much more. Such a dynamic and customizable tool that allows real-time statuses, proficiently supports user collaboration during decision-making, simplifies risk and regulation management, tracks regulatory compliance, and general AI governance (including AI visibility and enterprise monitoring services). IBM’s customers are using these AI governance tool to create innovative solutions, for example, IBM’s Innocens BV tool uses predictive AI to protect the most vulnerable newborns, and has made a great breakthrough in neonatal care with Cloud, Data and AI.

‘Operationalize AI across your business to deliver benefits quickly and ethically.’– IBM AI slogan.

IBM’s Chief Privacy & Trust Officer, Christina Montgomery, on May 16 2023, testified before US Senate Judiciary Committee at the first ever US Senate hearing on ‘Oversight of AI: Rules for Artificial Intelligence’. Two other witnesses, Sam Altman, Chief Executive Officer, OpenAI, and
Gary Marcus, Professor Emeritus, New York University, testified. IBM has developed a set of focus areas to guide the responsible adoption of AI technologies, which include;

  1. Respect for persons: mainly recognizes autonomy and consent of
  2. Beneficence: the principle of ‘do no harm’; and
  3. Justice: dealing with fairness and equality.
    Shutterstock, in October 2022, unveiled its AI-generated
    content capability plan in a way that is responsible and
    transparent to its customers, launched a fund to
    compensate artists for their effort to creating works. It
    positions itself as the vanguard of new creative storytelling


President Yoweri Museveni has assented to The Law Revision (Miscellaneous Amendments) Act, 2023. The President signed the said Bill into law on 10th May 2023.

Preview of The Law Revision (Miscellaneous Amendments) Act, 2023

The long title of the Act is;
“An Act to provide for the repeal of specified Acts; to provide for the conversion of fines and other financial amounts in specified laws to currency points; to provide for the conversion of financial amounts expressed in Pounds in specified laws to currency points; to provide for the amendment of several laws to correct the anomalies in those laws and to effect the decisions of the Constitutional Court and the Supreme Court; to transfer provisions in Finance Acts to the relevant laws and to incorporate provisions on winding up in the Collective Investment Schemes Act, 2003, the Partnership Act and the Cooperative Societies Act; and for related matters.”


Repeal of 81 Acts of Parliament As listed in Schedule 1 of the Act.

Conversion and modification of fines and other financial amounts in old Acts into currency points.
Putting the Evidence Act Cap. 6 in line with the Access to Information Act, 2005; allowing litigants to adduce evidence derived from unpublished official records relating to any
matters of the State.

There’s a new provision under the Magistrates’ Courts Act Cap. 16 that; Once one is granted bail prior to committal to the High Court, that bail does not lapse as a result of the committal but this does not mean that the High Court cannot cancel that bail at any time. Its powers are not limited.

The pre-trial remand limit under the Trial on Indictments Act Cap. 23 Cap. 23 has been reduced from 480 days to 180 days for offences punishable by death and from 240 days to 60 days for any other offences.
A detailed procedure of winding up Cooperative Societies under Schedule 2 of the Cooperative Societies Act Cap. 112.

Repeal of the following sections under the Penal Code Act Cap. 120: 39 & 40 on seditious intention and offences; 161, 162, 163 & 164 on gaming houses, gaming machines, betting houses and definition of persons managing or keeping such premises; 168 on rogues and vagabonds; 50 on publication of false news; 154 on adultery.

Repeal of section 7(2) of the Administration of Estates (Small Estates) (Special Provisions) Act Cap. 156 which used to prohibit appeals to the Court of Appeal for probate suits whose subject matter is less than ten thousand shillings unless special leave is first granted by the Court of Appeal.

Introduction of a fish levy in the Fisheries and Aquaculture Act 2022, which is a specific tax levied on exporters by URA depending on the fish type. The use of the word “Commissioner” has been replaced by “Registrar of Titles” in the Land Act Cap. 227 and validation of actions under the term “Commissioner” from 2004 to date.

Under the Divorce Act Cap. 249;

  • The grounds for divorce under section 4 are now fully open to either party to a
  • The provisions that used to only cover husbands are now available to wives (they are
    more inclusive & more gender-sensitive),
  • Section 26 regarding the settlement of a wife’s property, to the benefit of the husband
    or the children or both, at divorce or judicial separation on account of the wife’s
    adultery has been repealed

Creation of the Parliamentary Budget Office under the Administration of Parliament Act Cap. 257 and providing for the remuneration of members of Parliament save for those who are also members of the UPDF who can only benefit from this if they are earning less from UPDF.

Section 14 of the Parliament (Powers and Privileges) Act, Cap 258 has been repealed so it is no longer mandatory for anyone to seek leave of Parliament before giving evidence of proceedings in Parliament or in a Committee of Parliament.

The Police Act, Cap. 303; section 27A (2) and (3) has been repealed as well as section
32(2) and (3)
An extract of part of section 27A is as follows;
27A. Procurement of information and attendance of witness
(1) A Police officer not below the rank of assistant inspector of police making an
investigation into an offence may, in writing—
(a) require the attendance before him or her of any person whom he or she has reason
to believe has any knowledge which will assist in the investigation; and

(b) require the production of any document, matter or thing relevant to the of
fence under investigation.
(2) The attendance required under subsection (1) may be required at the near
est police station or police office situated within the area in which that person re
sides or, for the time being, is found.
(3) Subject to subsection (4), where a person requested to attend or to pro
duce a document or other matter or thing under subsection (1) without reason
able excuse—
(a) Fails to attend as required;
(b) Refuses, having so attended, to give his or her correct name and address;
(c) Refuses to produce any relevant document, matter or thing which may be
in his or her possession or under his or her authority;
(d) refuses to answer truly any question that may be lawfully put to him or
her, that person commits an offence and is liable, on conviction, to a fine
not exceeding forty thousand shillings or to imprisonment for a term not
exceeding three months, or both.
(4) A person shall not be required to answer any question under this section
which might tend to expose him or her to any criminal charge, penalty or

Section 32(2) of the Police Act which was empowering the IGP to prohibit the convening of any assembly or forming of any procession if the IGP has reasonable grounds for believing that the assembly or procession is likely to cause a breach of the peace.

Section 32(3) of the Police Act which was allowing the IGP to delegate the powers
enshrined in subsection (2).

Section 4(a) of the Uganda Printing and Publishing Corporation Act, Cap. 330 which provides for the objective of the Corporation being “to turn the Government Printer into
an effective and efficient resource” has been repealed.

Section 1(a) of the Hides and Skins (Export Duty) Act Cap. 339 which defines “game hide”
has been repealed.

A new tax has been levied on the exportation of hides and skins at a rate of US$ 0.80 per kilogram; to be collected by URA hence the repeal of Section 6(1) and the First Schedule which were providing for the rates as well as the powers of the Minister in this regard.

There is no more bail pending appeal for members of the UPDF who are being prosecuted
under the Uganda Peoples Defence Forces Act, 2005 because section 231 of the Act
has been repealed.

Section 248 (b) (i) and (ii) of the UPDF Act have been repealed therefore there is no more
granting of bail to convicted persons pending revision.

Repeal of section 58 of the Partnerships Act, 2010 has been repealed so the provisions
of the law relating to the winding up of an unregistered company under the Companies
Act with necessary modifications, to the winding up of a partnership under this Act will
no longer apply.

The Tax Procedures Code Act, 2014 has been amended to provide for recovery of tax
from a successor in business and to impose a minimum notice period of thirty days prior to discontinuance of a business and this notice is supposed to be given to the Commissioner General.

The same Act has been amended to provide for the tax liability of corporations.
Customs duty is also to be levied on goods for use by the Government.

Section 43A of the TPCA has also created a new duty for URA to issue certificates of origin as required under the EAC Customs Management Act, 2004.

The COMESA Treaty (Implementation) Act, 2017 has introduced a new definition of import duty in line with that of the East African Community Management Act, 2004 and it has also been amended under section 5A to provide for the tariffs to be levied on goods from COMESA.

The External Trade Act, Cap. 88 has been amended to provide for a commission of 2% of the value of the imported goods save for exempted goods and goods which are zero-rated.

A Surtax has also been imposed in addition to the normal taxes to be levied on imports in the 2nd column of the schedule to the Act that is; for imported waters including spa waters, aerated waters, lemonade, flavored spa waters, ad flavoured aerated waters, beer made from malt, still wine, grape must, not in bottle, other sparkling wine, whisky.

The Income Tax Act, Cap 340 has been amended to provide for dividends earned from a company which came into existence through stock exchange.

The Uganda Communications Act, 2013 has been amended to introduce a license fee for all persons who own satellite receiver equipment in Uganda. Such persons will henceforth be required to pay 15 currency points (Ugx. 300,000) before such a license can be granted.

The Roads Act, 2019 has been amended to impose road user charges on foreign-registered vehicles for every 100km covered in Uganda. Particularly; buses will be subjected to 5 dollars, trucks with 3 axles will be subjected to 6 dollars and trucks with more than 3 axles will be subjected to 10 dollars.

Section 25 of the Computer Misuse Act, 2011 has been repealed. This was the section that criminalized the use of electronic communication to disturb the peace, quiet or right of privacy of any person.

The Public Order Management Act, 2013 has been amended to repeal section 8 which used to provide for the powers of an authorized officer to stop or prevent public meetings, order the dispersal of public meetings having regard to the rights and freedoms of such persons in respect of whom such orders were made and it criminalized defiant persons.

The Anti-Pornography Act, of 2014 has also been amended to repeal sections 2, 11, 13 and 15. Section 2 was the Interpretation Section, section 11 used to stipulate the powers and duties of the Anti-Pornography Enforcement Committee, section 13 used to define and criminalize pornography and section 15 was empowering Court to issue warrants for the seizure of pornographic materials/ objects.

Specified Acts have been amended to provide for the definition of a currency point as assigned to each of those Acts as shown in schedules 2, 3 and 4 of the Law Revision (Miscellaneous Amendments) Act, 2023.

The Transitional provision of this Act is to the effect that where there are any court proceedings for the prosecution of the offences that have been repealed under this Act, those proceedings shall automatically terminate at the commencement of this Act. Accordingly; where the accused persons are in custody or remand, they shall be unconditionally released.

In summary, a total of 81 Acts have been repealed under schedule 1,
a) There is a conversion of fines and other financial amounts to currency points in 55 specified laws under schedule 2,
b) Fines and other financial amounts in the Penal Code Act have been converted to currency points in schedule 3,
c) Under schedule 4, we see a conversion of fines expressed in shillings in 19 specified laws to currency points
d) modification of low fees, costs and values in 6 laws that have been in force since the 15th of May, 1987
e) there has been a conversion of financial amounts expressed in pounds in 6 specified laws, to currency points.

Below are some of the comments from the public regarding this new law;

The Act has been put in place to facilitate the process of preparing the Revised Edition of the laws of Uganda by making amendments to the specified laws, where the amendment can only be affected using an Act of Parliament.

The current edition of the Laws of Uganda was published in 2000. Over the 22-year period, there have been a lot of amendments made to the laws of Uganda. To this end, ninety Acts of Parliament have been identified for repeal. These include Acts that were affected by the Government policy on liberalization of trade, laws that have become redundant due to the passage of time, laws that have been superseded by other laws and laws that have served their purpose and are therefore spent.

The object of the Act is to, among others, “provide for the repealed specified acts, to provide for the conversion of fines and other financial amounts specified in currency points and to provide for the conversion of financial amounts expressed in [British] pounds”.

Other reasons for the recent revisions, were to “provide for the amendment of several laws
to correct the anomalies in those laws and to effect the decisions of the Constitutional
Court and the Supreme Court…”

Under the Trial on Indictments Act and the Magistrates Courts Act, for instance, were provisions that required accused persons to be released on bail if they have been detained without commencement of trial for 480 days in the case of capital offences and 240 days in case of other criminal offences.

Those provisions were, however, declared unconstitutional as they go against Article
23(6) (b) of the Constitution which makes a different pronouncement on the matter. “In the case of an offence which is triable by the High Court as well as by a subordinate court, if that person has been remanded in custody in respect of the offence for 60 days before trial, that person shall be released on bail on such conditions as the court considers reasonable,” the article states.

The revisions saw the deletion of those sections that are not in line with the Constitution. The Administration of Parliament Act has been brought in line with Article 85 of the Constitution, and the MPs who are representing the UPDF, their Parliamentary salary will be paid differential to the amount by which their Parliament pay is less by the one from the army.

The last such revision occurred in 1994 and since then, several statutes or sections of laws were declared unconstitutional but were still in the law books for want of revision. One such provision is Section 50 of the Penal Code Act, which criminalized the publication of false news but was declared unconstitutional in the case of Charles Onyango Obbo & Anor v Attorney General.

There are several Acts of Parliament that come and repeal their predecessors and were also declared unconstitutional, like the Budget Act that was repealed under the Public Finance Management Act, which repeal was effected at the enactment of this Act.

Up to 90 obsolete laws were erased from the law books with Attorney General, Hon. Kiryowa Kiwanuka saying; “laws that have never been applied or used in over 50 years are to be expunged from the law books for being redundant.”


The object of the Micro-Finance Deposit-taking Institutions (Amendment) Bill, 2022 was to amend the Micro Finance Deposit-Taking Institutions Act 2003 to provide for the use of the word ” bank” by Microfinance Deposit Taking institutions; to provide for Islamic banking; to provide for bancassurance; to provide for agent banking, to provide for special access to the Credit Reference Bureau by other accredited credit providers and service providers; and for other related purposes.

1. Agent Banking

Under Section 4 of the Amendment.

The rationale for this is to bring financial services closer to the people and foster financial inclusion. While the benefits of agency banking have been enjoyed by the clients of Tier 1 and 2 banks with the 2016 amendment of the Financial Institutions Act, 2004, the same had not been experienced by the MDIs since the law had not been amended to allow them to have agents.

2.  Islamic Banking

Under Part IIIA inserted in the Principal Act

This is premised on the fact that Islamic Banking as an alternative to traditional banking has its intended benefits that low-income and rural savers and borrowers were excluded from accessing. Islamic Banking will thus further propel asset-based micro-economic growth among rural and peri-rural savers, whose assets are the only way to access interest-free financing from MDIs engaged in Islamic Banking. This is particularly significant for government which would benefit in terms of programme funding without having to incur huge fees.

Financing Arrangements under Islamic Banking;

There are four categories of financing arrangements under Islamic banking-.

i) Partnership financing. Under partnership financing, assets are owned by the Financial Institution and the customer. The Financial Institutions’ portion is sold to the customer over the term or on conclusion of the contract.

ii) Equity-base financing. Here, capital is provided by the Financial Institution and managed by the customer. The profits arising from such management of capital are shared between the Financial institutions and the customer.

iii) Lease-based frnancing. Assets are purchased by the Financial Institution and leased to the customer. These are akin to leases in conventional banking.

iv) Sale based financing. Assets are purchased by the Financial Institution and sold to the customer at a mark-up. The customer thereafter pays for the asset in installments.

3.  Bancassurance

Part IIIB – Conduct of Bancassurance by Micro Finance Deposit- Taking Institutions

With the current insurance penetration levels in the country at a measly 2%( as per the Country Diagonistic Report on Market and Regulation of Micro-Insurance in Uganda undertaken by the Bank of Uganda’s Financial System Development Programme in November 2013). Permitting MDIs to offer bancassurance services is a way to ensure its growth as this shall enable affordable and accessible premiums for low income earners.

4. Reduction in number of share owned by a single shareholder in an MDI

Under Section 21A;  from 30% to 25%

This is because the concentrated shareholding among MDIs poses a higher risk to customers. It is therefore best international practice and aligns with Basel core principle 6 relating to significant ownership to limit the number of shares owned by the largest shareholder in an MDI to 25%.

5. Constitution of the Board Audit Committee

Under section 22A

This is aimed at legitimizing the Consolidated Corporate Governance Guidelines as issued by the Bank of Uganda in October 2022 whose aim is to reinforce sound corporate governance principles among financial institutions under its supervision, including MDIs.

Conclusion and Analysis

Currently, the existing MDIs have been offering limited services compared to commercial banks. The new law has been put in place to cure the inadequacies of the Micro Finance Deposit-Taking Institutions Act, 2003. This is because some of the provisions of the old law have proved to be barriers to the new financial product developments and innovations which are less costly and consumer driven.

These summarily include among others; the conduct of Islamic banking which has become a popular form of micro-finance business especially because of its less reliance on interest, selling of  insurance as a way of achieving financial inclusion for a large proportion of the population with less costs and importantly, the use of agents will enable Micro Finance institutions to bring services closer to the people who are not necessarily within the banking sector.

Noteworthy is;

  • The relationship between two key aspects, international tax gap and international tax
    fraud, and;
  • The effectiveness of the existing framework of international tax laws and regulations.

The International Center for Tax and Development – ICTD estimates that almost three-
quarters of countries in the world are 80% dependent on their tax revenue, and attributes 85% of the tax gap to tax fraud. International Tax-gap information on offshore and cross-border tax revenue is a little bit murky. However, the ICTD reports that one-third of the tax gap is international today. What is a tax gap? Simply put, its a cultural phenomenon marking the difference between actual tax collected and what ought to have been collected resulting from non-compliance. Noteworthy is the depth of impact of the multifarious issues, culture, processes, rules, law, politics, and statistics involved in international tax fraud, a risky tax area that continues to slew tax authorities and a huge challenge to the global economy.

Tax Fraud is committed against a government (and tax-paying nationals) of any country across the globe. The important adage of tax fraud is a (sometimes intentional) surreptitious violation of a known legal duty to pay taxes. Certainly, every country has some form of laws prohibiting tax fraud and regulating its compliance, and the best possible approach to be used in understanding all about particular tax laws, compliance or fraud is by consulting a local tax expert legal counsel of a given country or jurisdiction for guidance.

Any actions or omissions typically involving concealed information or false claims committed to defraud a government of owed tax money is Tax Fraud. It is also a fundamental element of the informal economy,
call it the grey economy. The Association of Certified Fraud Examiners – ACFE research shows that anyone with sufficient pressure, adequate opportunity, and the ability to rationalize a dishonest act is at risk of committing any kind of fraud.

“A typical tax evaders apparent knowledge about whistleblowing schemes does not deter them from evading tax even with the assurance of anonymity and the likelihood of being caught.”

Tax Evasion is tax fraud and thus illegal. It is any fraudulent intentional action that is committed to avoiding reporting or paying tax but it is not to be confused with tax avoidance or violation of proper tax procedures, which can result in fees and interest penalties.

Tax Avoidance is an actual lawful method of lowering ones tax bill by legitimate deductions, credits, and shelters mainly made possible by structured practices of domestic tax base erosion and profit shifting (BEPS). In global business, it is the multinational enterprises that exploit BEPS, the lapses in tax systems of different countries, and the non-coherent international tax rules, which more often than not, contribute to tax evasion.

Tax evasion is fraudulent in a way characterized by the perpetrators inadequate moral development, however, don’t be mistaken, more often than not the perpetrator possesses measured intellectual development which vastly aids fraudulent schemes to a level of resilience.
No surprise that a well-designed inexpensive whistleblowing scheme put in place to catch organized group tax evaders does not significantly alter their inner cooperation and operations. More so, a typical evaders apparent knowledge about whistleblowing schemes does not deter them from evading tax even with the assurance of anonymity and the likelihood of being caught. Long-standing tax evaders seek legal advice on all loopholes in the law and the tax structural setup before the decision to avoid tax. A night-mare for law enforcement and tax capacity-building pillars for enforcement of tax fraud.

Until recently, with exception of some jurisdictions, the regular determinant of tax evasion was acting with criminal intent, and to determine such intent, the jurisdictions where it works require a willful act or attempt rather than an honest mistake, to constitute tax evasion. The United Kingdom did away with the requirement of proving intent to evade tax and thus turned tax evasion into a strict-liability offense. Strict liability offenses do not require proof of the element of intent.

The International Tax Regulatory Framework works to determine how a country collects and manages tax revenue from the cross-border movement of capital, technology, goods, and services supplemented with Territorial Tax Policy Frameworks that impact international taxation. The Framework includes;

  • Territorial and International Rules that define and determine what income will be taxed by the source country and Rules intended to minimize double taxation, and tax avoidance by multinationals;
  • Over 3900 specific Bilateral and Unilateral Tax Treaties in force worldwide;
  • The prospective evolutionary and revolutionary multilateral BEPS 2.0 (Pillar one & Pillar two) Rules to be implemented in 2023 (Including; the Global anti-base Erosion Rules (GloBE Rules) such as; the IIR Income Inclusion Rule, and the Undertaxed Payment Rule UTPR, and a treaty-based rule termed as Subject to Tax Rule STTR)

Tax laws are concerned more with legalistic aspects of tax rather than taxs financial, economic, or administrative aspects, however, sometimes its hard not to correlate those aspects all together. Here, what is of interest regards how to manage cross-over tax revenue of an individual, organization, or country, involving different national tax systems and international transactions including income from highly intangible assets such as patents and trademarks among others.

Each cross-border transaction attracts a certain tax and triggers one or more international tax rules as cross-border tax rules are understood to exist not only for purposes of limiting gaps that multinational corporations use to minimize their cross-border tax obligation but also to regulate tax crime.

“The rules must be aligned with what makes the most sense from a tax perspective because they impact the behavior and reaction of multinational corporations to tax compliance.”

Under the American 2017 Tax Cuts and Jobs Act – TCJA, it is mandatory that the taxable income of goods manufactured partly within, and partly out of the USA, be apportioned and allocated in both or all countries involved in the manufacturing activities.

Estonia has some proven and authentic tax perspectives. Arguably, today Estonia has the best territorial tax system around the world attributed to its least compliance burden, zero property transfer tax, an allowance to reinvest corporate profits tax-free, almost zero tax on foreign profits earned by a resident or domestic corporation, and low marginal tax rates in other aspects, encouraging investment and business with high returns after-tax.

Despite the extensive network of tax treaties existing the world over, and largely whose intention is to prevent tax cheating by closing tax loopholes, treaty abuse has risen by way of treaty-shopping.

Tax treaty-shopping is classic treaty abuse that happens when one taps the benefits of a tax treaty while being neither an intended beneficiary by design nor a member of the tax treaty, and as a result it;

  • Abuses the first bite at the apple rule in international taxation regarding primacy in taxation by member countries;
  • Brings about the unquantifiable political damage issue;
  • Deprives intended treaty members of their negotiated tax revenue supremacy;
  • Alters the agreed balance of concessions among members;
  • Causes inadequate taxation or no taxation at all; and
  • Exacerbates resident members loss of incentive to remain a party to the treaty.

To that end, the OECD BEPS Action 6 Review Reports suggest some recommendations for reforms and establishing minimum standard measures to curb tax treaty abuses and in the end, facilitate the effort against tax evasion.

Tax evasion more often than not transcends national boundaries mostly due to investigative and jurisdictional limits of a countrys revenue authority. The main types of such jurisdictional limits are; secrecy jurisdictions, tax shelters, and tax havens.

“Tax Shelters are designed to yield benefits to multinational investors and result in tax write-offs, deductions, and conversion of taxable income to capital gains taxed at minimal rates.”



In this article, I discuss the relationship between the current steps taken by different countries in not only embracing the era of virtual currencies (crypto-currency) but also steps taken to regulate the same and what that means for Uganda and other developing economies.

The writer will briefly discuss the evolution of the Ugandan currency UGX and the inception of Crypto-currencies, the major salient features of crypto currencies and their operative mechanisms. The writer will then examine the need for embracing, harnessing and nurturing this rather young player in the financial market to ensure that both the governments and their people benefit from technology. In the same spirit, the writer will throw light on the reasons why Crypto-currencies need to be regulated.

The writer will finally discuss the advantages of adopting Crypto-currencies especially for under-developed countries trying to further their goals of financial inclusion for all and building their economies.


From using Barter trade to Cowrie shells, to the Indian rupees in the 1800s, to the East African currency, the Ugandan economy has taken a slow but surely formidable turn in the evolution of its currency. Right from the time Uganda attained her independence in the early 1960s, the then newly issued Uganda Shillings Currency (UGX) could only give one a glance at what would come in the future with the newly created Bank of Uganda its custodian.

With almost all political regimes that the country has experienced, majority if not all regimes have adopted a modus operandi that has seen the Uganda shillings go through a robust series of evolution depending on what that specific regime desires until the year 2013 when the 1987 series ceased to be legal tender.

The most salient feature about the Ugandan currency is the fact that it is centralized and
what this means is that it can only be issued, controlled, and regulated by the state, through its organs and in this case being the Bank of Uganda which is Ugandas central bank.

However, aside from the various services that traditional banks offer including but not limited to digital transactions, the 2008 global economic crisis gave birth to many but a million challenges and opportunities that came along with the 4 th industrial revolution. And among these was the creation of the Blockchain technology that allows and runsnthe operation of crypto currencies in the fall of 2009.

The creation of the Block chain technology has taken a more robust shift in as far as economic evolution is concerned. It is estimated that over 1583 crypto currencies have since the inception of the Block chain technology come up and are being used in daily transactions albeit lacking any regulatory framework. 1 These include Bitcoin, Lite coin, Ethereum, Tether, BNB, Dodge Coin to name but a few. It is equally estimated that over 300 million people have to date been involved in crypto-currency transactions.

It is important to note that this being a completely new spectrum of economics, there has not been much regulatory measures taken by governments to regulate how best this realm operates, recent years have seen a number of countries embracing the era of digital currencies and taken steps towards regulating the same.

With countries like Canada, Singapore, Malta, Nigeria, South Africa, Kenya, USA among others taken steps to embrace this new wave of digital transactions, what does this mean for Uganda and how can Uganda interest herself in the rapidly growing Crypto eco-system.

What is Crypto-Currency?

For many, this won’t probably be the first time to hear about it but to hear about and understand are two different things. With this article, the writer will help you navigate through the basic principles for your understanding and guide you to appreciate more about what this new development in technology means for East Africa and Uganda in particular.

Crypto-currencies or Virtual Currencies as many referred to them have been defined as a digital representation of value that functions as a medium of exchange or a store of value. The European Banking Authority defines Virtual Currencies as a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a [fiat currency]. 3
Just like the cash me and you use at the mall, or your favorite local store to buy groceries, Virtual currencies or digital currencies are accepted by natural or legal persons as a means of payment for goods and services and can be transferred, stored or traded electronically.

One of the main salient features of crypto currency is that the system is decentralized or in other words, the system is not centrally controlled by any one individual, bank, institution, or government.
The transactions are made by account holders and the interaction is strictly peer to peer with no intermediaries. The accounts are anonymous and although the transactions are transparent in that account holders can see the transactions on the ledger, one cannot know who they?re transacting with at the other end.

As noted earlier, there are a number of crypto currencies that are in operation and these include Bitcoin, Ethereum, Lite coin, Ether, Dodge Coin, Z-cash, Stellar Lumen to mention but a few. This has seen a number of multi-million companies and investments add Crypto-currencies as one of the main payment mechanisms. For example, companies such as Rakuten, Twitch, AMC, Microsoft, PayPal among others have since added a medium through which one can pay for their services using Crypto-currencies.

As such, the current crypto landscape and ecosystem must be considered to be more than just an evolution of an electronic payment system but a major economic player that has the potential of changing the world of transactions. The fact that it has diversified from the initial intended function of transferring coins between peers. Crypto and blockchain technology is now becoming a major disruptor of how our economy and our society functions and indeed given us a glance and what the future holds.

How do Virtual Currencies Crypto-Currencies operate?

The government of Uganda through its ministry of Finance released a press statement in 2016 commenting on the emergency of Crypto-currencies in the Ugandan market.
The government while acknowledging that Crypto-currencies are digital assets that are designed to effect electronic payments without the participation of a central authority or intermediary such as a Central Bank or licensed financial institution, notified Ugandans that these are not a legal tender. 5

The government of Uganda (GOU) like many other governments feared that the volatile nature of the Crypto-currencies and their other features would be a dangerous risk for Ugandans to partake in.

In a circular dated April 29, 2022, the Bank of Uganda noted that it was concerned that advertising agents have been marketing mobile money for crypto transactions and vice versa, an illegal business in the country.

In the statement, the GOU warned that unlike other owners of financial assets who are protected by Government regulation, holders of crypto-currencies in Uganda do not enjoy any consumer protection should they lose the value assigned to their holdings of crypto-currencies, or should organization facilitating the use, holding or trading of crypto-currencies fail for whatever reason to deliver the services or value they have promised.

As noted earlier, the high volatility rates of the Crypto rates mean that the currencies are not stable and their prices change with the change of different situations. For example, the prices of Dodge Coin doubled up in 2021 when Elon Musk announced that he would invest in it. Another situation will happen and the prices will drastically fall.

Whereas it is true that the Crypto-ecosystem clothes itself with the utmost uncertainty of how secure your investments are due to the lack of regulation, we cannot ignore the fact that as a medium of payment and property, people across the world are using it and it is rapidly impacting the operation of global economic markets.
Thus, is it therefore pertinent for the Ugandan government and other developing governments to invest in studying how best they can regulate the Crypto-arena, harness and incorporate it into their economic and financial systems.

What are some of the Key features Crypto-currency?

The most salient of features of Crypto-currency are what actually double up as the causes of fear amongst different governments when it comes to the adoption of Crypto- currency. These include; –

  1. Decentralization.
    As noted earlier on, there is no individual, government, bank, institution or organ that
    governs or regulates crypto currencies. The transactions and interactions are strictly
    peer to peer and there is no intermediary in between. This means that one does not
    have to go to the bank to be able to withdraw money or deposit money, transactions can
    happen at any place and moment as long as one has an internet connection. The
    transactions are kept in one main ledger that contains the transactions that have ever
    taken place on Blockchain. Different from banks which keep individual ledgers for their
  2. Anonymity of transactions.
    The transactions that take place on Block chain can not be imputed on any specific individual. The system works in an algorithmic form and does not display who one is dealing with, but rather displays that a certain transaction has taken place between two different people. There are although fears that this specific feature may further the commission of crimes since individuals can be able to move money to facilitate crime without being traced. Also, money laundering has been a major fear among a number of states.
  1. The Crypto-currencies prices are volatile.
    As noted hereinabove, crypto-currencies unlike the conventional bills of exchange have
    no real value. Their prices can be determined by anything that happens be it war,
    political climate or social factors. For example, Bitcoin, the world’s oldest and most
    popular cryptocurrency, rose to all-time highs since the beginning of 2021, before
    plummeting and losing a huge amount of its value thereafter in the same year.

Why Uganda and other East African countries need to embrace FinTech in this case Crypto-currency and nurture it through establishing a workable legal and policy framework?

The introduction and potential proliferation of private virtual currencies might, in one view, threaten to erode the demand for central bank money and the transmission mechanism of monetary policy. A Central Bank Digital Currency (CBDC) may forestall such private virtual currencies or relegate them to a secondary role in the payments system. This threat is not imminent given the current transactions domain and limitations of existing private virtual currencies and their likely medium-term growth. Stability and safety considerations connected to this proliferation may, however, be relevant in the medium run but
could presumably be dealt with by other measures.

The inception into the market of Crypto-currencies should not at all be viewed only as a threat but also an opportunity which ought to be exploited by the governments. Once well regulated, Crypto-currencies offer one of the most efficient ways of carrying out electronic transactions.

Considering the fact that most areas except urban areas in East Africa are still unbanked or underbanked, crypto-currencies offer a medium where the unbanked or underbanked can access financial services including, trading online (i.e. investing in stock), buying and selling properties, payment services among others. In the long run, this would increase the number of people who are financially included and thus
achieving the SDG goal of financial inclusion for all.

In regulating the Crypto-currencies, the governments will focus on structuring them as either currencies, properties (capable of being taxed), bill of exchange or promissory notes whichever they zero down to lest we risk having more and more unregulated transactions happening behind our backs while living in the shadows of ignorance.
There are other reasons why governments need to embrace, intervene and regulate these transactions. These include; –

i. To protect investors

Since we’ve already seen that the market and the prices of Crypto-currencies are volatile, there is need to have certainty in the rates and or prices so that investors feel more secure to invest their money. 7 Once investors are secure, then its sure common knowledge that they will be willing to invest even more money in the Crypto-arena. This will also protect investors from the bursts in the prices that have seen many lose
millions of dollars over time.

ii. Determine which Crypto-currencies to allow

Currently, there are over 1586 crypto-currencies out there that people transact with. The governments need to identify which ones work well for their people. The lack of information about all these crypto-currencies mean that people are likely to lose money wile transacting with a less credible crypto-currency.

iii. Online fraud and cyber security risks

Online risks such as cyber-attacks, fraud and hacking are major risks or threats for any online transactions that happen worldwide. One cyber-attack could result in losses for investors who have put their savings in cryptocurrencies. Through regulations, governments can implement measures to help cryptocurrency investors protect their assets.

iv. Money Laundering

As mentioned before, the fact that the transactions that take place on Blockchain remain anonymous means that criminal activities such as money laundering could take place and remain unnoticed. Through regulation, governments would put in measures to counter this vice.


We have seen that in as much as governments have distanced themselves from the operations of Crypto-currencies, their existence and later impact in the global economic and financial systems can not be ignored. The challenge that many African countries is facing is failure to adopt newer technology and merely see it as a threat to what is already existing.
The new-normal that has been ushered in by the Covid-19 pandemic dictates that we ought to evolve in the way we did things before and adopt a more technological lifestyle.
Who knew one would sit in their bed and still attend a work meeting via zoom? Similarly, a time is coming when one will not need to go to bank to access financial services, to buy a house in LA, to invest in stock and later reap benefits by just using a phone and internet connection.
The fact is that once these Crypto-currencies are regulated they will offer a more of decentralized banking system but still over seen by the central bank. This would then foster the increase in the number of people who are financially included.
If left unregulated, Crypto-currencies will remain a smooth medium through which illegal activities such as money laundering take place and this will in the end have dire consequences on the economy. If left unregulated, the Crypto-currencies will also expose Ugandans to a market where once the balloon bursts and people lose all their investments or savings, the consequences will be rather heartfelt.

A Review of the National Payments Systems Bill in Uganda.

Government has finalized consultations and the drafting of the Uganda National Payments Systems Bill (Bill) which will regulate all electronic payments in Uganda. This update is to explore the Bills highlights, put forward recommendations and make a case for wider consultations with existing small market operators.

Uganda is a cash economy, Electronic payments account for only 20% as compared to cash, which is 80%. However, Uganda has recorded unprecedented growth in electronic payments, which has led to a sharp fall in use of paper payment instruments like cheques and others.

Some of the existing electronic Payment operators and systems include:

Bank of Uganda (BOU);

  • Uganda National Interbank Settlement System (UNIS) – It is an RTGS for interbank fund transfers.
  • Electronic Clearing System (ECS) – this is used by BOU to clear paper based instruments, electronic credit
  • transfers and direct debits.
  • Central Securities Depository (CSD) – this system is used to register ownership and transfer of government
  • securities.

Commercial Banks;

  • Funds Transfers These are used by bank customers to transfer money from one account to another.
  • Automated Teller machines (ATMs) These enable bank customers to withdraw from their bank accounts using readable plastic cards from convenient places.
  • Internet banking – it enables customers to undertake financial transactions on their bank accounts through web based technology.
  • Mobile financial services -these are banking services accessed by customers through a telecom company as an intermediary, services may include lending like Mokash, Wewole, Mobile Money and more.
  • Cards – These are payment instruments issued to bank customers like debit and credit cards.
  • Point of Sale (POS) – These are automated machines that allow bank customers to purchase goods using their cards at retail stalls, restaurants, Bars etc.

Private Sector Payment services (Use of Third Parties);

  • Inter switch (Retail payments switch) – This enables card transactions to be routed between participants. Examples include VISA, MasterCard, American Express and others. They enable a person to transact without the need to directly use the service of a bank from which they hold an account.
  • Automated Transfer System Depository (ATSD) – Uganda Securities Exchange uses it for sale and transfer of listed equities and securities.
  • Mobile network operators & mobile payment services ? these are offered by telecommunications companies with support from their Bankers. Here mobile telecoms act as intermediaries to perform transactions on behalf of financial institutions thence providing a more convenient Point of sale using GSM technology.
  • Stored value Cards- these are prepaid cards like fuel cards, gift cards etc.
  • Aggregators- these are service providers through which banks, non-financial institutions, telecoms and other Companies process payment transactions.
  • Remitters- these are service providers that transfer funds on behalf of a client from one jurisdiction to another.

All payments system operators will require a license from BOU.
This brings us to the Question.

Who is required to obtain a license?

  • The Bill permits financial institutions to operate payment systems without a license. This is because financial institutions are primarily licensed to provide payment services. Apart from financial institutions, all other operators must obtain a license, these may include the following;
  • Telecommunication Companies operating mobile money platforms like MTN, Airtel and Africell.
  • Stock exchanges operating independent payment systems.
  • Money remittances, though regulated by BOU, the Bill does not expressly exempt them from licensing.
  • Card operators like MasterCard, VISA, America Express, and Union Pay etc.
  • Companies issuing pre-paid cards including fuel cards, gift cards.
  • Retail outlets operating inter switch machines like Supermarkets, Restaurants and Bars etc.
  • Aggregators or payment gateways.

How to apply for a license.

Only Companies are permitted to apply for a license subject to submission of the following;

  • Rules of the payment system.
  • Incorporation information.
  • List of fit and proper persons to act as directors.
  • Financial position and repute of the shareholders.
  • A clear organizational structure and capital of the entity.

The Bill also requires operators to have a prescribed minimum capital, which will be set by BOU in subsequent regulations.

In addition to the above:

An Applicant for a license must have specific objectives in its memorandum and Articles of Association, as follows;

  • To clear payment instructions between banks and other institutions.
  • To transfer funds from one account to another using electronic devices.
  • To provide technological services that facilitate switching, routing, clearing etc.
  • To transmit and order payment instructions etc.

Companies in Uganda are permitted to engage in any lawful trade with sanction of its directors. It is not a legal requirement for a Company to have specific objectives. We therefore question the applicability of a clause in the Bill that contradicts the Companies Act (primary Act).


The National Payments Systems Council:

It is suggested as the policy making body for electronic payments. It will be composed of representatives from Ministry of finance, Capital Markets Authority, National Information Technology Authority, Uganda
Communications Commission, financial institutions, Uganda Bankers Association, Telecommunication companies etc.

Electronic Money Issuances and Transfer:

The Bill defines electronic money as a monetary value stored
electronically. This definition is wide enough to include a data message, crypto currency etc. Electronic money issuers must obtain a license before operating in Uganda. These include mobile money companies, crypto-currency houses etc.

Entities intending to issue electronic money are required to establish a subsidiary Company for the purpose of applying for a license. However, the Bill is not clear on whether the subsidiary entity must be locally incorporated as earlier asserted by some legal practitioners.

Statutory Accounts

Electronic money issuers are required to open different types of bank accounts with licensed financial institutions.
These include;

  • Trust Accounts;
  • They hold customer funds and such funds are only applied for their benefit.
  • Approved trustees who become a body corporate with approval from BOU manage the Account.
  • Cash balances on the account must be equal to the electronic money issued.
  • Special accounts; these are to be opened only by financial institutions intending to issue electronic money with approval from BOU.
  • Dormant accounts; these are accounts that have not registered a transaction for more than 12 months. The Bill proposes closure of such accounts subject to notification of the account holders; it also allows recovery and investment of funds on such accounts.

Permissible transactions and prohibited Activities.

Under the Bill, electronic money can only be used for the following purposes;

  • Domestic payments and transfers,
  • Bulk transactions like salary payments such as benefits and pensions,
  • Over the counter and cash in / out transactions,
  • International remittances,
  • Credit products& saving products in partnership with financial institutions.

The Bill further prohibits electronic money insurers from receiving and taking deposits within the meaning of a financial Institutions Act.
The use of airtime as electronic money is also prohibited.

Insolvency & Collateral Arrangements of Licensees.

Under the Bill, Insolvency proceedings against a service provider or licensee only apply prospectively not
retrospectively; this nullifies the relation back principle akin to insolvency theory.

The Bill also requires operators to have adequate liquidity to facilitate settlement of a payment instruction.

  • Collateral Arrangements.

These are agreements between licensees (collateral takers) and other entities (collateral givers) that undertake to underwrite the risk of insolvency of a licensee. The Bill proposes that a prescribed amount of
money or moneys worth be set aside by the collateral giver to act as security for an insolvent licensee.
The security so pledged ceases to be property of the collateral taker.


Ad valorem pricing:
This occurs when a payment operator charges a random commission not based on cost of processing an order.
Skimming of Payments:
This happens where a service provider illegally retains a certain portion of money transferred.
Payment systems in Uganda are arguably not inter linked to enable quick settlement of payment orders.
Poor dispute resolution module:
Market participants lack capacity to investigate and resolve disputes in a just and timely manner
Lack of a licensing criteria.
Liquidity challenges:
Several Companies participating in the sector are start-ups; thus, finance is a constant threat and eminent danger to operations.


Yes, the Bill solves some of the key challenges of the sector.


Licensees need to be categorized to ease regulation: the Bill should classify licenses as follows;

  • Class A – For electronic money issuers and transferors.
  • Class B – Retail payments handlers.
  • Class C – Aggregators and remitters.

Each class with its unique capital requirements, license and fees payable.

  • The Bill should exempt or set lower minimum capital requirements for market participants that have been in operation for more than 3 years before enactment of the law.
  • The Bill should expressly prohibit anti-competition practices.
  • National payments system council is not necessary; its mandate is a duplication of the ministry of finance and BOUs role, it should be deleted.
  • Requiring Applicants to have specific objects is not legally tenable, as thus, it should fall.
  • The Bill should allow electronic money issuers to take deposits and offer saving services to their customers. This will enable mobile customers to save money on their accounts by either fixing it for a particular period of time or otherwise. This will improve the savings culture and broaden the savings pool in Uganda.
  • A special financial service tribunal should be created to entertain payments, Capital Markets, Telecommunications, Banking and other financial related matters. This will ease dispute resolution and reduce case backlog in mainstream Courts.
  • The Central Securities Depository and other payment systems must be linked with mobile money platforms to ease purchase of capital markets products. This will improve our investment culture, capitalize Government and local Companies.


The bill needs to be more consulted rather than rushed, if not, it risks creating monopolies thus subduing its many benefits.


The mandate to regulate is a creature of statue and cannot be implied or assumed by executive orders or pronouncements. Crypto currencies are a known asset class for both individual and institutional investors in the securities market. Several exchanges in the world have been granted licenses to trade crypto assets these include Binance, ProShares on the New York Stock Exchange among others.

In the bid to protect the interests of investors; proactive capital market regulators have moved in to regulate crypto currencies companies as issuers of securities. A case in point is, the Capital Markets Authority (Kenya), FINMA (Switzerland), Securities Exchange Commission (USA), Financial Conduct Authority (UK), Autorit des marchs financiers (France) etc.

The safest regulatory approach to crypto currencies includes; approving of entities that issue and trade crypto assets and mandatory registration of virtual asset service providers under the Anti Money laundering laws.  Many crypto currencies service providers have been registered as virtual asset service providers under the Financial Intelligence Authority in compliance with Anti Money Laundering Act.

Crypto currencies are securities which fall under the mandate and regulation of Capital Markets Authority in accordance with section 1 of the CMA Act. The decision of Bank of Uganda, to admit crypto currency entities in its payment systems regulatory sandbox is not legally tenable because the appropriate regulatory body is the Capital Markets Authority.

According to Nakamotos white paper (2008), crypto currencies were created to achieve a decentralized electronic cash system managed peer to peer without intervention of a regulator. It was wrong to assume that that you can have such an impact on the financial sector without government regulation. 

According to World Bank, in 2018 Seventeen Million Bitcoins had been created with an aggregated value of USD 138,000,000. To-date, market capitalization for crypto assets stands at $ 1 trillion. In May this year, JP Morgan published a report to the effect that Bitcoin was undervalued by 28% and recommended it as an asset class.

With all those positive developments, why is Uganda reluctant to adopt the now known regulatory approach to crypto currencies?

Part of the problem is strategy in the Nakamoto’s white paper. The idea that you can part take in the financial sector without regulation is and was moot. This is because of the intricate nature of the financial sector where all matters must be scrutinized, monitored and vetted for better economic planning or taxation.

On 1st October 2019, Ministry of Finance Planning and Economic Development issued a public notice confirming that crypto currencies are digital assets but were not regulated in Uganda.

This year, the central bank issued a statement stopping all licensees under the National Payment Systems Act from facilitating trade in crypto currencies. After a few months, the same entity changed goal posts and instead advised crypto currencies entities to join its regulatory sandbox.

Therefore, BOU & the Ministry of Finances agenda on crypto currencies is contradicting and inconsistent. The two alpha financial controllers are on a trial-and-error strategy which is a self-destruction mission.

In times of uncertainty, subjectivity and grave inconsistences between individuals and government entities, the law has been trusted to always provide the golden standard.

Any person who desires to participate in the financial sector must submit to regulation. Fortunately, Crypto-assets service providers through the Blockchian Association of Uganda have, on several occasions, expressed interest in being regulated.

Unfortunately, government agencies including Bank of Uganda, Capital Markets Authority have maintained that there is no law to support such regulation. This illegal, unconstitutional and unfair to the crypto-asset service providers.

The governments approach to crypto-currency violates the right to development and its role to develop this country. Under objective IX of the constitution, government is mandated to encourage private initiatives in order to achieve equitable development. It is also the role of government under objective XI of the Constitution to regulate acquisition of all kinds of property in order to achieve social justice.

The definition of securities under section 1 of the CMA act is wide enough to include financial instruments, options, futures, and investment contracts provided they are managed collectively on behalf of the 3rd parties for profit or interest.

In Wiseman Talent Ventures Vs Capital Markets Authority of Kenya (2019) eKalr, Justice M.W. Muigai, while faced with a critical issue on whether crypto currencies were regulated in Kenya had this to say:

On the other hand I agree with the Respondent that the absence of a specific regime does not ouster jurisdiction of the general regime of law as exemplified by the cited provisions of Capital Markets Act and the application of the Howey test outlined above. The interpretation of cryptocurrency as a security is because it is a scheme that involves an investment of money in a common enterprise with profits to come solely from efforts of others as illustrated by Howey test.

He added that: …therefore, cryptocurrency is either outlawed or regulated in some form in various countries. The Defendant has residual jurisdiction as per Section 2 & 11 of Capital Markets Act to regulate crypto currencies as securities.

Admission of crypto-currency service providers under the BOU regulatory sandbox is not legally tenable because the proper entity to regulate them is the Capital Markets Authority. CMA and other regulatory entities should exercise their mandate under the law in order to enhance development.

I, therefore call upon CMA to establish a regulatory sandbox to entertain these innovations rather than avoiding them.

What the commencement of the Uganda Retirements Benefits Regulatory Authority (Assignment of Retirements Benefits for Mortgages and Loans, 2022 Regulations means for Ugandans.


The Uganda Retirements Benefits Regulatory Authority (Assignment of Retirements Benefits for Mortgages and Loans, 2022 Regulations that were passed by Parliament on the 25th February 2022 finally came into force on the 10th May 2022. The much-awaited regulations were passed with the main talking points being the leeway it grants to savers in different schemes to use their accrued benefits for purposes of financing mortgages and housing loans. This article will discuss what this means for Ugandans and shed light on what is required of each beneficiary in case of the need to enjoy their benefits.


The Uganda Retirements Benefits Regulatory Authority Act enacted in September 2011 established the Uganda Retirements Benefits Regulatory Authority. The main functions of the Authority are among others to regulate and supervise the establishment, management, and operation of retirement benefits schemes in Uganda, in both the public and private sectors.

The Act in Section 68(2) provided that a proportion of the benefits shall be used by a member of a scheme to secure a mortgage or a loan for purchasing a residential house from any institution and on such terms as may be prescribed in regulations made under the Act. The Act further gives the Minister power to make regulations generally for giving effect to the provisions of this Act and for its due administration.

Consequently, the Minister of Finance and Economic Development in consultation with the Uganda Retirement Benefits Regulatory Authority board came up with the Uganda Retirements Benefits Regulatory Authority (Assignment of Retirements Benefits for Mortgages and Loans, 2022 Regulations that are meant to operationalize Sections 68(2) (a) and 91(1), (2)(j) by providing for procedures that a member shall follow to use a proportion of his or her benefits to secure a mortgage or a loan for purchasing a residential house. Passed into law on the 22nd day of February 2022, these Regulations came into force on the 10th of 2022.

What does this mean for Ugandans?

Regulation 6 of the Regulations is to the effect that a member may enter into an agreement with an institution to use his or her accrued benefits as security for a mortgage or a loan for purchasing a residential house. That such a member may assign (a) a maximum of 50% of his or her accrued benefits under the retirement benefits scheme at the time of the application for the facility; or (b) a portion of his or her accrued benefits equivalent to the market value of the residential house, whichever is less.

Further, a member who, prior to the commencement of these Regulations has a mortgage or a loan for purchasing a residential house, may upon application to the trustees in the manner prescribed in the scheme rules, assign his or her accrued benefits to an institution as security for the mortgage or loan

The coming into force of these Regulations was much welcomed by a majority of Ugandans who had been waiting in anticipation. What this development means is that members in schemes who have saved for at least 10 years shall be able to apply for and if eligible obtain 50% of their savings for purposes of securing a mortgage or buying a residential house.

It is important to note that this law is clear and specific that while making Applications of this nature, the purposes for which the money is being sought should be limited to either securing a mortgage or a loan for purchasing a residential house.

For that reason, regulation 6(4) mandates the trustees to review the mortgage or a loan facility offer for purchasing a residential house, referred to in the application before either granting or rejecting the same.

How does one access their savings?

The law requires that a member shall, upon obtaining a letter of offer for a facility, apply to the trustees to assign a proportion of his or her accrued benefits as security for a mortgage or a loan for purchasing a residential house. It is important to note that prior to making an Application for the accrued benefits, the member will prove by an offer letter that he or she has applied for a mortgage or loan facility from a financial institution.

Upon application by a member, the trustees shall within 7 days from the date of the Application carry out a review into the eligibility of such an Applicant member to determine whether he or she meets the requirements. Whereafter, the trustees shall either reject or allow the Application.

While carrying out the review, the trustees shall ensure the following;

  • that the application submitted is for purposes of enabling a member to use a proportion of his or her accrued benefits as security and shall not result in a reduction of his or her retirement benefits;
  • the facility applied for does not exceed 50% of the accrued benefits of the member;
  • the member applying for assignment of his or her accrued benefits has executed a written commitment to pay the facility in accordance with the agreed terms and conditions of the facility;
  • the member is gainfully employed or has sufficient income which can be used to pay for the facility
  • the purpose of the mortgage or loan applied for by the member is solely for securing a mortgage or loan facility to purchase a residential house

After conducting the review, the trustees shall notify the Applicant in writing of their decision. If satisfied that the Applicant has met all the requirements of the Application, the trustees shall witness the deed of assignment executed between the member and the institution.


These developments follow the recent amendment of the National Social Security Fund Act that paved the way for members to access half their savings provided they have saved for a minimum of 10 years. This will go further in aiding Ugandans especially in improving their social lives during this post-Covid-19 pandemic era.