Published on 11/04/2025
A report of the Committee on Finance, Planning and Economic Development reveals that it will take government 12 years to clear domestic arrears of over Shs13.8 trillion.
The report presented by the Committee’s Deputy Chairperson Hon. Moses Aleper cited the Auditor General who noted that domestic arrears had increased from Shs10.5 trillion in the 2022/2023 financial year.
“The committee observed that government has provided Shs1.1 trillion for domestic arrears for financial year 2025/2026,” Aleper said.
“Whereas this is an improvement from the previous year where only Shs200 billion was provided, even at this rate, it will take government over 12 years to clear all the domestic arrears if no new arrears are accumulated,” he added.
The committee recommended that the Minister of Finance provides a comprehensive plan on how to clear domestic arrears in the medium and long term, stating that non-payment of the arrears cripples the private sector and undermines economic growth.
Deputy Speaker, Thomas Tayebwa said that whereas there is an increment in funds allocated to clear domestic arrears, more still needs to be done.
“By the time small companies that supply at district level are paid, the money cannot even cover the interest accrued,” he said.
Hon. Peter Okot (DP, Tochi County) faulted the Finance Ministry officials saying that they have failed to supervise accounting officers.
“Accounting officers were warned not to commit government where they do not have money. Does this mean that the Finance Ministry has failed in supervising the accounting officers?” he said.
Tororo District Woman MP, Hon. Sarah Opendi said government needs to reduce the domestic arrears by 50 per cent warning that, failure to do so will lead to collapse of businesses.
“There must be a deliberate effort to remove wasteful expenditure to tackle the issue of domestic arrears. How are these companies going to employ Ugandans? People get into businesses to sustain themselves and their families and pay taxes,” Opendi said.
Hon. Agnes Auma (Indep., Lira District) called on the Ministry of Finance to prioritise release of funds to government entities saying that this leads to accruing of domestic arrears.
“Domestic arrears are becoming a shame to the country and the leaders. These activities are budgeted for; where does the money go? We have to take this as a serious matter and we want the Minister of Finance to commit himself,” she said.
The Minister of State for Finance (General Duties), Hon. Henry Musasizi said that the ministry has a plan to clear all verified domestic arrears in three years adding that the increment in allocation of funds to clear the arrears is a good sign.
“Domestic arrears under the former Uganda National Roads Authority have substantially been provided for; they now have about Shs2 trillion,” Musasizi said.
He also said that the Shs13.8 trillion figure as reported by the Auditor General needs to be verified.
“Some people have Shs13 trillion, others have Shs10 trillion and there is also a Shs5.7 trillion somewhere. Depending on the audit report you are looking at, the figure keeps changing,” said Musasizi.
