Gov't domestic arrears hit sh8.7trillion

The Assistant Auditor General Audit Kato Nyapendi ((fourth left) introducing staff from the Audtor General's Office , to Speaker of Parliament Rebecca Kadaga, while Auditor General John Muwanga (second right) and Deputy Auditor General Corporate Affairs Francis Masuba looks on. PHOTO/Kennedy Oryema

The government domestic arrears have reached sh8.7trillion, the Auditor General has revealed.

Of the sh8.7trillion, sh2.2trillion are arrears of companies that supplied goods and services to government and sh6.5trillion government liabilities of which 90% are court awards given to people who won court cases against government.

Handing over the 2015/2016 audit report to the Speaker of Parliament, Rebecca Kadaga, the Auditor General, John Muwanga, asked parliament and the executive to pay the arrears because they attract interest.

 "As a result of government's failure to pay these awards on time, the awards have accumulated interest and in some instances the interest has exceeded the principal award. This is not sustainable," Muwanga observed.  

The Auditor General John Muwanga (left) hands over the 2015-2016 Audit Report  to Speaker of Parliament Rebecca Kadaga, at Parliament. PHOTO/Kennedy Oryema

Kampala Capital City Traders Association Issa Ssekitto recently informed parliament that most troubled/distressed businesses are of people who supplied goods and services to government and they were not paid.

Whereas government is experiencing shortfalls in revenue collections, its domestic and external debts are increasing at a sporadic rate. The sh8.7trillion excludes domestic debts of money government borrows from commercial banks.  

Increasingly, the biggest portion of the national budget now goes towards servicing the various public debts government has incurred over the years. In the current budget of sh26trillion, sh7.7trillion, which is 30% of the total budget, is for debt repayment.

According to Uganda Debt Network, Uganda's public debt has been sporadically rising from $1.9b in the 2008/2009 financial year to $11b as of last year.