It will take the government 12 years to clear outstanding domestic arrears of Shs 13.8 trillion, a report by the committee on Finance, Planning and Economic Development has revealed.
The report presented by the committee’s Deputy Chairperson, Moses Aleper, said domestic arrears had increased from Shs 10.5 trillion in the 2022/2023 financial year to Shs 13.8 trillion.
“Whereas this is an improvement from the previous year, where only Shs200 billion was provided, even at this rate, it will take the government over 12 years to clear all the domestic arrears if no new arrears are accumulated,” Aleper said.
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 the district level are paid, the money cannot even cover the interest accrued,” he said.
Peter Okot, MP for Tochi, faulted the Finance ministry officials, saying that they have failed to supervise accounting officers.
“Accounting officers were warned not to commit the government where they do not have money. Does this mean that the Finance Ministry has failed in supervising the accounting officers?” he said.
Tororo Woman MP, Sarah Opendi, said the government needs to reduce the domestic arrears by 50 per cent, warning that failure to do so will lead to the collapse of businesses.
Agnes Auma, the Lira Woman MP, called on the Ministry of Finance to prioritise the release of funds to government entities, saying that this leads to the accumulation 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, 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.
