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A report from the Committee on Finance, Planning and Economic Development reveals that the government will take over 12 years to clear domestic arrears totalling more than Shs13.8 trillion.
The report, presented by the Committee’s Deputy Chairperson, Hon. Moses Aleper, highlighted the Auditor General’s findings, which show a rise in arrears from Shs10.5 trillion in the 2022/2023 financial year. Aleper confirmed that the government had allocated Shs1.1 trillion for domestic arrears in the 2025/2026 financial year, an increase from the previous year’s Shs200 billion.
However, he warned that at this rate, clearing the arrears would take over 12 years, assuming no new arrears are incurred. The committee recommended that the Minister of Finance devise a comprehensive plan to address domestic arrears in both the medium and long term.
Failure to resolve this issue, the committee stated, is harming the private sector and stifling economic growth. Deputy Speaker, Thomas Tayebwa, acknowledged the increase in funds allocated to clear the arrears but stressed that more action was required.
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“By the time small companies at the district level are paid, the funds will barely cover the interest accrued,” he noted. Peter Okot (DP, Tochi County) criticised the Finance Ministry for failing to properly supervise accounting officers, adding that government officials had been warned against committing funds without adequate provisions.
“Has the Ministry failed in its oversight duties?” he asked. Tororo District Woman MP, Sarah Opendi, called for a 50% reduction in domestic arrears, warning that the failure to do so could lead to the collapse of businesses.
“We must eliminate wasteful expenditure to tackle the arrears problem,” she said, emphasising the importance of sustaining businesses to provide jobs and pay taxes. Agnes Auma (Indep., Lira District) urged the Ministry of Finance to prioritise funding for government entities to prevent further accumulation of arrears.
“Domestic arrears are a national embarrassment, and we need serious action,” she said. The Minister of State for Finance (General Duties), Henry Musasizi, stated that the ministry has a plan to clear verified domestic arrears in three years.
He also pointed to the significant allocation of funds for Uganda National Roads Authority arrears, which now stand at around Shs2 trillion. Musasizi added that the Shs13.8 trillion figure reported by the Auditor General requires verification, with varying amounts reported in different audit reports. “Depending on the report, the figure fluctuates between Shs10 trillion and Shs13 trillion,” he explained.