KAMPALA – Civil Society Budget Advocacy Group [ CSBAB ] has urged government to address domestic arrears in the new financial year which begins on July 1, 2023.
Patrick Rubangakene, CSBAG’s economist was on Monday this week presenting their position on the Ministerial Policy Statements for 2023/2024 before parliament’s Committee on Finance, Planning and Economic Development chaired by Keefa Kiwanuka.
According to Rubangakene, the Shs 200 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 Shs 2.75 trillion in 2017/2018 to Shs7.55trn in 2021/20222, an increase of 175 percent,” Rubangakene said.
The Auditor General’s report shows that domestic arrears increased from Shs 4.65 trn in 2021 to Shs7.55 trn in 2022.
Rubangakene said the Finance 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 submission presented by CSBAG, Jane Avur Pacuto, the deputy chairperson of the Committee 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,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.
According to the National Budget Framework for the financial year 2023/24, by the end of June 2022, the total public debt stood at Shs. 78.799trn [US$ 20.98bln]. Of this debt stock, Shs 48.136trn [US US$ 12.814bln] is external while Shs 30.662 trillion [US$ 8.162bln] is domestic debt.
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.
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