The Civil Society Budget Advocacy Group (CSBAG) has sounded an alarm, urging the government to implement effective measures to address the escalating issue of domestic arrears. The group, led by program advisor Jeff Wadulo, expressed concern over the rapid accumulation of arrears, signaling a lack of substantial effort in enforcing the 2021 strategy designed to eliminate and control such arrears.
In the upcoming financial year, the government has allocated Shs217 billion to settle domestic arrears, representing its outstanding obligations to local contractors who provided goods and services to various ministries, departments, and agencies.
CSBAG’s economist, Steven Alor, highlighted the potential economic impact, stating that if the government maintains an annual allocation of Shs217 billion for clearing domestic arrears, it could take up to 35 years to settle all outstanding debts, assuming no additional arrears are incurred. This, he emphasized, poses a significant impediment to the growth of the private sector-driven economy.
The advocacy group called on the government to implement stringent control mechanisms, including holding accountable accounting officers who violate the Public Finance Management Act by accumulating arrears without demonstrating efforts for payment.
CSBAG also urged Parliament to advocate for an increased budgetary allocation to clear domestic arrears in the next financial year.
During a committee meeting chaired by Hon. Achia Remegio, CSBAG proposed a repurposing strategy by identifying budget items that could be delayed, such as donations, official ceremonies, state functions, travels, workshops, and classified assets and expenditures. Jeff Wadulo stressed the importance of finding additional funds apart from anti-corruption efforts.
Members of Parliament on the Budget Committee supported CSBAG’s recommendations, emphasizing the need to prioritize arrears not accounted for in the upcoming financial year. Hon. Abed Bwanika and Hon. Gyaviira Ssemwanga highlighted the significance of settling arrears related to government assurances, especially those affecting domestic suppliers who procured loans from banks.
The Budget Committee, having received reports from sectoral committees on the Budget Framework Paper for all sectors, is scheduled to discuss critical programs that have not been budgeted for in a report with the Finance Ministry on Monday, January 22, 2024.
