Uganda’s domestic debt repayment ‘could take 48 years’

Members of Parliament have been warned that Uganda could take nearly half a century to clear its outstanding domestic arrears if the current repayment pace remains unchanged. 

The concern emerged during a meeting of the Parliament of Uganda’s Public Accounts Committee with officials from the Ministry of Finance, Planning and Economic Development.

The discussion centred on findings contained in the Office of the Auditor General report released in December 2025, which estimated the country’s domestic arrears at about Shs8.4 trillion. 

Domestic arrears refer to payments owed by government to private companies and individuals who have supplied goods, services or undertaken public works but remain unpaid.

During the meeting, legislators questioned whether the government’s planned allocation to clear the arrears was sufficient given the size of the outstanding obligations.

Basil Bataringaya, Member of Parliament for Kashari North, analysed the figures presented by the ministry and pointed out that the government plans to allocate only Shs200 billion in the 2026/27 national budget to reduce domestic arrears. 

Based on that figure, he estimated that it would take more than four decades to fully settle the current debt stock.

“If you compute it, at Shs200 billion per year, clearing around Shs9.6 trillion would take about 48 years,” he told the committee.

He further cautioned that this projection assumes the debt will remain static, which is unlikely. According to the legislator, domestic arrears tend to grow each year as new obligations accumulate.

“So even that estimate does not consider the additional arrears that may arise in the future,” Bataringaya noted.

Responding to the concerns, Ramathan Ggoobi, the Secretary to the Treasury, said the government is committed to gradually reducing the outstanding obligations despite financial constraints.

He explained that the Shs200 billion allocation represents the amount already available in the government’s baseline budget.

“That is the money currently in the base,” Ggoobi said. “If additional resources become available, we shall increase the amount. But we cannot pay money we do not have.”

He however, revealed that the government had requested the Auditor General to verify the arrears claims, a process that uncovered inconsistencies in some of the reported figures.

According to Ggoobi, preliminary verification results indicate that a portion of the claims may lack sufficient evidence to justify payment.

“We asked the Auditor General to re-examine the arrears and the results show that some claims were not backed by proof that the suppliers actually delivered goods or services,” he explained.

However, the explanation did little to reassure some legislators. Gorreth Namugga, Vice Chairperson of the Public Accounts Committee, questioned whether the modest annual allocation would realistically reduce the arrears burden.

She noted that Shs200 billion has been the typical allocation in several previous budgets, except for the 2025/26 financial year when the government temporarily increased the amount to Shs1.4 trillion.

“With arrears standing between Shs8 trillion and Shs9 trillion, allocating only Shs200 billion raises questions about how the government intends to clear the backlog,” Namugga said.

She warned that delayed payments are placing severe pressure on businesses that rely on government contracts, arguing that the situation risks weakening Uganda’s private sector.

Despite the debate, the Treasury maintains that a new verified figure for domestic arrears will soon be released by the Auditor General, which could significantly change the size of the outstanding debt portfolio.