Ramathan Ggoobi, the Secretary to Treasury
Government is seeking to clean its image as bad business partner and start paying its suppliers within ten days after invoice is issued.
This is contained in the budget framework paper for FY2022/23 that was tabled before Parliament by the Ministry of Finance that noted that the new proposal is intended to ensure prudent macroeconomic management and effective implementation of the budget as well as speedy economic recovery in the coming fiscal year 2022/23.
The Ministry made 12 recommendations that Government can undertake in the coming budget among which includes timely payment of government suppliers and the clearance of domestic arrears for which funds have been provided in the budget for the fiscal year 2022/23.
“To avoid stifling private sector investment and associated consequences such as the increase in rates of non-performing loans, which in turn increases the cost of borrowing and lead to distress, loss of employment and production. Going forward, all government institutions will be required to pay suppliers within 10 days from the date of invoice,” the executive summary of the 2022/2023 National Budget Framework Paper, reads in part.
The Ministry also revealed that in the coming budget, Shs400bn has provided for outstanding arrears.
In November, Secretary to Treasury, Ramathan Ggoobi revealed that the verified domestic arrears pending clearance by Government are worth Shs1.6Trn not Shs4Trn as earlier reported and Shs555bn was going to be set aside in the 2022/2023 national budget for payment of domestic arrears.
Government is also proposing to enforce strict adherence to Performance Contracts by Accounting Officers in order to ensure accountability with results, effective next fiscal year.
State Minister for Finance (General Duties) Musasizi said: “My ministry will strictly be based on performance reports, achievements of NDPIII results for which resources have been provided for and audit reports for reappointment of accounting officers across government.”
The Minister also threatened to suspend and arrest all accounting officers whose projects are off track so as to ensure financial discipline to the management of public resources.
“Going forward, only projects with feasibility studies and have been evaluated through the PIMS Framework will be admitted to the Public Investment Plan (PIP). Also, starting next fiscal year the Government will provide funds for feasibility study equivalent to US$ one (1) million,” Musasizi added.
It is a good move by the government.