Domestic arrears for the goods and services consumed by Government from various businesses and companies stands at UGX8.4Trn as of June 2025, a reduction of 39% from the 2024 arrears of UGX.13.814Tn.
However, there is verification needed to establish the accuracy of these reported areas from Government agencies.
The revelation is contained in the December 2025 Auditor General’s report to Parliament, in which the Auditor General, Edward Akol, informed Parliament that he tasked the Ministry of Finance to ensure adequate budgeting for domestic arrears and enhance enforcement of commitment control for sustainability.
“A review of the Consolidated Financial Statements of the Government of Uganda and the disclosure in Note 25 revealed that the GoU had accumulated domestic arrears to a tune of UGX.8.4Tn as at 30th June 2025, a reduction of 39% from prior year arrears of UGX.13.814Tn. This office is conducting a comprehensive verification of the domestic arrears across all Ministries, Departments, Agencies, and Local Authorities,” noted Akol.
He added: “The objective is to determine the accurate stock of domestic arrears for the Government. Detailed procedures have been designed to ensure that the Government’s position on domestic arrears is accurately reflected. The detailed findings will be published separately.”
The development comes at the time when Remigio Achia, Vice Chairperson, Parliament’s Budget Committee raised concerns over the meagre budget of UGX200Bn allocated for the clearance of domestic arrears in the coming 2026/27 National Budget Framework Paper.
“Persistent domestic arrears strain private sector cash flows, undermine confidence in government contracts, and weaken job creation, while also eroding budget credibility as voted expenditures go unpaid Budget allocations for clearing domestic arrears have remained inadequate despite the Domestic Arrears Strategy and the PDMF 2023, which recommended annual funding of UGX450 billion; actual allocations averaged only UGX200Bn. Although UGX1.4Trn is allocated in FY 2025/26, the NBFP FY2026/27 to 2030/31 proposes reverting to UGX200Bn annually from FY2026 /27,” Achia said.
Parliament adopted the recommendation by the Budget Committee to have arrears cleared within three years with Achia noting, “There is need for sustained commitment to the domestic arrears strategy, including clearing existing arrears within three years from FY2026/27 and tackling their underlying causes.”
