Summary:
- 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, which will cost the government UGX 3 trillion in interest, bringing the total repayment to over UGX 11 trillion.
KAMPALA: The government has committed to ending the practice of minimal budgetary allocations for clearing domestic arrears, promising substantial funding in the coming years.
This follows concerns from MPs over the rising unpaid 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.
“The issue of arrears is a priority. Previously, we allocated UGX 200–400 billion, which was insufficient. However, we have verified arrears of UGX 5.8 trillion, and the Internal Auditor General is reassessing all outstanding amounts. Starting next financial year, we will make significant payments,” Ssemugooma stated.
His remarks were echoed by Ramathan Ggoobi, Secretary to the Treasury, who emphasized the government’s efforts to clear arrears and prevent further accumulation. He also warned accounting officers against committing to contracts without securing funds.
“We are doing everything possible to settle these arrears, as seen with the Bank of Uganda. We are also engaging the Ministry of Works to secure funds for matured certificates. However, without supplementary budgets, raising the required funds remains a challenge,” Ggoobi noted.
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, which will cost the government UGX 3 trillion in interest, bringing the total repayment to over UGX 11 trillion.
MPs, including Jesca Ababiku (Adjumani DWR), expressed frustration over the growing arrears and the government’s failure to enforce budget control measures.
“I am uncomfortable with arrears rising from UGX 10.5 trillion to UGX 13.8 trillion. Our goal should be to clear them, not normalize their accumulation,” Ababiku said.
The government’s focus on infrastructure arrears follows the January 2025 National Budget Framework Paper (NBFP), which flagged the lack of provisions for unpaid certificates in the Ministry of Works and Transport budget, especially after it took over Uganda National Roads Authority (UNRA) functions.
According to the Parliamentary Physical Infrastructure Committee, infrastructure sector arrears total 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.
At the start of FY 2023/24, the national roads sub-programme had a UGX 970.7 billion debt on the development budget and UGX 37.8 billion on maintenance, yet the Ministry of Finance allocated only UGX 31 billion for arrears.
During the 2025/26 National Budget Framework Paper review, 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 an annual allocation of UGX 1.15 trillion 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 of UGX 14.06 trillion, including UGX 8.312 trillion in Bank of Uganda reimbursements and UGX 5.748 trillion in unpaid invoices, pensions, and gratuities,” 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—less than the UGX 250 billion needed for pension and gratuity arrears alone. We have seen elderly pensioners in 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.
