What you need to know:
- Dr. Okello also criticized NGOs over weak governance structures, including failing to charge meaningful membership subscription fees.
The government has advised Non-Governmental Organizations (NGOs) operating in the country to urgently explore internal revenue-generation avenues to maintain operations, as international funding continues to dry up.
Speaking at the NGO Risk, Compliance, and Resilience Conference 2026 in Kampala on October 23, Dr. Stephen Okello, the Executive Director of the National Bureau for NGOs under the Ministry of Internal Affairs, expressed concern over the sector's heavy reliance on foreign donors.
The conference, themed "Transforming Regulatory and Operational Challenges into Opportunities for Growth and Greater Impact," was organized by Onyango & Company Advocates in partnership with the Ministry of Internal Affairs, the NGO Bureau, the Civic Advisory Hub, and the Personal Data Protection Office.
Dr. Okello noted that while NGOs are inherently non-profit entities, the government amended the law nearly a decade ago to allow civil society organizations to generate their own income.
“Much as NGOs are supposed to be non-profit making, in 2016, in the NGO Act, the government introduced a component for NGOs in Uganda to open a business component that raises income for them. But I can tell you, between 2016 and to date, how many NGOs have taken advantage of that? How many have turned themselves into social enterprises so that they can raise income in addition to relying on donations?” Dr. Okello asked.
He revealed that fewer than 10 organizations out of thousands in the country have adopted the model.
“If you wanted my honest answer, I would put it at 1%—actually zero point something, because we don’t get to see them. The ones I know are not more than five or 10,” he added.
According to Dr. Okello, financial self-reliance would also strengthen local NGOs’ bargaining power with international donors.
“Someone who has nothing is so desperate that every condition a donor gives, you just keep saying 'yes, yes.' You don’t even want the word 'no' to appear anywhere, thinking the donor may change their mind. Meaning that even if they give you the worst terms and conditions, for the sake of getting funding, you accept,” he warned.
Uganda’s civil society sector has faced consecutive funding shocks over the past six years. Before 2020, NGOs enjoyed massive funding streams, but the COVID-19 pandemic severely disrupted international development budgets.
The crisis deepened following the closure of the Democratic Governance Facility (DGF)—a multi-donor basket fund established in 2011 by international development partners to support governance, human rights, the rule of law, and civil society in Uganda.
“Then everyone woke up one day, and operations had been suspended. They were out of operation for about one and a half years when finally the government cleared them. But DGF said, 'No, it's not enough; we are leaving.' So they packed and left. It hit the sector so hard,” Dr. Okello recalled.
The sector faced another major blow on July 1, 2025, when the U.S. administration officially shut down and dismantled the U.S. Agency for International Development (USAID) after terminating over 80 percent of its global assistance programs. Uganda experienced an estimated 66 percent reduction in USAID support—translating to a loss of between Shs1.35 trillion ($307 million) and Shs2.2 trillion ($500+ million) in frozen or lost annual funding.
Dr. Okello also criticized NGOs over weak governance structures, including failing to charge meaningful membership subscription fees.
“No one pays any subscription or membership fee, yet they are very active at AGMs trying to give their views and wanting to be elected. Tomorrow, if we wanted to nullify internal decisions of these NGOs, we could do it because many sitting members don't pay subscription fees,” he noted.
“In this day and era, if you have a subscription fee of Shs1,000, Shs2,000, or Shs5,000, what is it going to do for the organization? You need members who can contribute at least Shs1 million upwards so that if you have 100 members, you feel you have the right people on board.”
On regulatory compliance, Dr. Okello noted that while compliance levels improved from 26.8% prior to 2016 to 62.4% today, many organizations still fall short due to weak boards composed of friends rather than qualified professionals.
Responding to the government’s call, Mr. Yona Wanjala, Executive Director of the Civic Advisory Hub, welcomed the idea of social enterprises but called for clearer anchoring in the legal framework.
“Bringing an element where NGOs can run social enterprises—where acquired resources are ploughed back into running the affairs of the organization—is fair enough,” Mr. Wanjala said, though he challenged the framework for sometimes treating civil society organizations as security threats.
Addressing concerns regarding regulatory enforcement, Ms. Martha Oundo, Assistant Commissioner for Inspection and Compliance at the National Bureau for NGOs, reassured organizations that the Bureau prioritizes correction over punitive actions.
“In many cases, the purpose of inspection is to help the organization identify its compliance gaps. Where concerns are minor, we give a timeline or roadmap to address those gaps,” Ms. Oundo explained.
“If it has to end with revocation of an operational permit, we issue a Notice to Show Cause, giving the organization at least 30 days to provide justification before a final decision is taken.”