By Mulengera Reporters
The government has committed to ending the practice of “tokenism budgetary allocations” in clearing domestic arrears, promising to allocate substantial resources in the coming years. This follows concerns from MPs over the rising unpaid domestic arrears, which have surged from UGX 10.5 trillion in June 2023 to UGX 13.8 trillion in June 2024.
The commitment was made by Godfrey Ssemugooma, Acting Accountant General at the Ministry of Finance, while appearing before the Public Accounts Committee (PAC) on March 4, 2025, during discussions on the Auditor General’s 2023/24 report for the ministry.
“The issue of arrears is a priority for the Ministry. Previously, we had token allocations of UGX 200 billion or UGX 400 billion, which were insufficient. However, we have audited figures of UGX 5.8 trillion, and the Internal Auditor General has been recommissioned to verify all arrears. Starting next financial year, there will be a significant settlement of these obligations,” Ssemugooma explained.
His remarks were echoed by Ramathan Ggoobi, Secretary to the Treasury, who emphasized that the government is devising mechanisms to clear the arrears and prevent further accumulation. He warned accounting officers against committing the government to contracts without securing funds.
“We are doing everything possible to settle these arrears, as seen with the Bank of Uganda. Currently, we are engaging the Ministry of Works to secure funds for matured certificates. Without supplementary budgets, raising the required funds remains a challenge,” Ggoobi noted.
Debt Burden
Maris Wanyera, Acting Director for Debt and Cash Policy at the Ministry of Finance, revealed that UGX 8.312 trillion—the largest portion of domestic arrears—has been restructured through amortization and a 10-year bond. This restructuring will see the government pay UGX 3 trillion in interest, pushing the final repayment cost beyond UGX 11 trillion.
MPs, including Jesca Ababiku (Adjumani DWR), expressed frustration over the growing arrears, criticizing the government’s failure to implement budget control guidelines. “I am uncomfortable with the continued increase in arrears from UGX 10.5 trillion to UGX 13.8 trillion. Our goal should be to clear all arrears, not normalize their accumulation,” Ababiku said.
Infrastructure Sector Arrears
The government’s focus on arrears in the infrastructure sector comes after the National Budget Framework Paper (NBFP) of January 2025 flagged a lack of provisions for unpaid certificates in the Ministry of Works and Transport budget. This follows the ministry’s takeover of Uganda National Roads Authority (UNRA) functions.
According to the Parliamentary Physical Infrastructure Committee, infrastructure sector arrears stand at UGX 1.55 trillion, including:
- UGX 765.4 billion for contractors
- UGX 571.2 billion for land compensation
- UGX 213.5 billion for suppliers under non-wage expenditure
Parliament learned that at the start of FY2023/24, the national roads sub-programme had a UGX 970.7 billion debt on the development budget and UGX 37.8 billion on the maintenance budget, yet the Ministry of Finance allocated only UGX 31 billion for arrears.
UGX 200Bn Arrears Allocation
During the review of the 2025/26 National Budget Framework Paper, the Parliamentary Budget Committee rejected the UGX 200 billion earmarked for domestic arrears, arguing it was insufficient compared to the UGX 14.06 trillion owed. Instead, the committee recommended UGX 1.15 trillion per year to clear outstanding arrears.
Achia Remigio, the committee’s vice chairperson, emphasized the need for realistic budgeting. “The UGX 200 billion allocation is far below the verified arrears, which stand at UGX 14.06 trillion, including UGX 8.312 trillion in reimbursement to the Bank of Uganda and UGX 5.748 trillion in unpaid invoices, pension, and gratuity,” he stated.
The meager allocation was also criticized by Ibrahim Ssemujju (Kira Municipality) in his Minority Report on the 2025/26 Budget Framework Paper. “Domestic arrears have hit UGX 14 trillion, a 30% increase from UGX 10.8 trillion in 2023/24. Yet, only UGX 200 billion is allocated to clear them. This amount isn’t even enough to cover pension and gratuity arrears of UGX 250 billion. We have seen elderly pensioners shedding tears on television due to unpaid dues,” Ssemujju lamented.
With Parliament pushing for a UGX 1.15 trillion annual allocation, it remains to be seen whether the government will follow through on its commitment to clear domestic arrears and enforce budget discipline-Parliament Watch. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
