KAMPALA – The Bank of Uganda’s decision to cap over-the-counter cash withdrawals from January 2027 is about far more than limiting how much money people can take out of a bank. It is an attempt to reshape how money moves through the economy, nudging Uganda away from a cash culture and towards a financial system where large transactions leave a digital trail.
Under the new rules, individuals will be limited to withdrawing Shs 50 million a day and Shs 250 million a week over the counter, while businesses will face caps of Shs 500 million daily and Shs 2.5 billion weekly. The restrictions will not apply to electronic payment systems such as Real Time Gross Settlement (RTGS), Electronic Funds Transfers (EFTs) or other digital channels, and banks will be able to seek exemptions for certain sectors or transactions.
At first glance, the announcement may appear to be a restriction on access to personal funds. In reality, the central bank is trying to change behaviour rather than deny access to money. Large payments are expected to move electronically instead of leaving bank halls in cash-filled bags, creating records that can be tracked and verified.
The policy reflects a transformation already underway. According to the Bank of Uganda, electronic credit transfers have grown from handling 87.71 per cent of transaction volumes in the 2017/18 financial year to 93.53 per cent in 2025/26, while their share of transaction value has climbed from 79.33 per cent to 93 per cent. Mobile money has also averaged about a quarter of all transactions annually since 2020/21, suggesting that consumers increasingly trust digital payment systems.
For regulators, the benefits are straightforward. Cash is costly to transport, vulnerable to theft and difficult to trace. A system that channels more high-value transactions through electronic platforms could strengthen oversight, improve audit trails and make it harder for corruption, money laundering, tax evasion and other informal financial practices to flourish.
Yet the same policy that looks logical from a regulator’s desk could prove more complicated on the ground.
Formal businesses that already rely on bank transfers may barely notice the change, apart from enjoying lower cash-handling risks and cleaner accounting records. But many sectors still depend heavily on physical cash. Traders in Kikuubo, produce buyers, cattle dealers, construction suppliers and agricultural middlemen often operate where suppliers expect cash, internet connections are unreliable and digital transaction fees remain a burden.
The Bank appears aware of those realities. It has instructed supervised financial institutions to adopt risk-based customer profiling, allowing lower limits where appropriate, while also providing for discretionary waivers for certain transactions or sectors. A nationwide public awareness campaign will begin on July 1 2026, to prepare consumers before the rules take effect on January 1, 2027.
Public reaction already reflects that tension. Some have questioned whether a Shs 50 million daily limit is too restrictive or argued that the policy overlooks the needs of informal businesses and coffee traders who routinely make large cash payments. Others have challenged the central bank’s priorities, suggesting lending costs deserve greater attention than withdrawal limits. The Bank has responded by noting that only about nine per cent of cash withdrawals exceed Shs20 million, indicating that the overwhelming majority of customers would remain unaffected.
International experience suggests Uganda is following a broader trend. Countries such as Kenya and Nigeria have encouraged larger transactions to move through electronic channels to reduce cash dependency and improve financial transparency. But those examples also demonstrate that success depends less on the policy itself than on implementation.
If digital systems remain expensive, unreliable or inaccessible, businesses may see the withdrawal caps as another bureaucratic hurdle rather than a modernisation effort. If banks lower costs, strengthen security and ensure dependable services, the reform could gradually formalise more of Uganda’s economy and make everyday commerce safer and easier to monitor.
The deeper message is that cash is slowly losing its privileged position. For households and businesses alike, preparing for a future where major payments happen electronically may soon become less of a choice and more of an expectation.