Members of the Civil Society Budget Advocacy Group (CSBAG) have urged government to address domestic arrears in the 2023/ 2024 financial year.
The civil society group led by their economist, Patrick Rubangakene was on Monday, 27 March 2023 presenting their position on the Ministerial Policy Statements for 2023/2024 before the Committee on Finance, Planning and Economic Development chaired by Hon. Keefa Kiwanuka.
According to Rubangakene, the Shs200 billion budgeted to clear arrears is insignificant to reduce the current burden of domestic arrears. “We appreciate the Finance Ministry for developing a strategy to clear and prevent domestic arrears in June 2021. However, domestic arrears have continued to increase annually from Shs2.75 trillion in 2017/2018 to Shs7.55 trillion in 2021/20222, an increase of 175 per cent,” Rubangakene said.
The Auditor General’s report shows that domestic arrears increased from Shs4.65 trillion in 2021 to Shs7.55 trillion in 2022. Rubangakene said the ministry needs to urgently address this matter to avoid continued stifling of the country’s economic growth.
He also preferred sanctions and penalties for accounting officers who continue to accumulate domestic arrears against contracting frameworks in accordance with Sections 70 and 80 of the Public Finance Management Act, 2015.
CSBAG further urged government to be cognizant of the accumulating public debt burden whose nominal value stands at Shs86.6 trillion as at June 2022. “Government needs to develop an annual debt borrowing plan that is consistent with preserving debt sustainability to inform the upcoming financial year budget and adhere to it for improved budget execution,” he said.
Reacting to CSBAG’s submission, Hon. Jane Avur Pacuto, the Deputy Chairperson of the Committee on Finance, Planning and Economic Development blamed the Finance Ministry for the accumulating domestic arrears. “As Parliament, we have tried our best to put what is adequate on the budget. In fact, in this current financial year, we recommended that Finance clears all domestic arrears…The challenge is that what is approved is not what is released [by Ministry of Finance],” Pacuto said.
Otuke County Member of Parliament, Hon. Paul Omara said Parliament is as concerned as the civil society in pursuit of sustainable debt management measures. “The indiscipline in government is completely unacceptable and there is no guarantee that URA will achieve its revenue targets. In an environment where you are not generating enough revenue, it is foolish to continue borrowing unabated,” Omara said.
Founded in 2004, CSBAG is a coalition that brings together civil society actors at national and district level to influence government decisions on resource mobilisation and utilisation, gender-responsive and sustainable development.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.