Uganda: Auditor General Raises Alarm Over Budget Gaps, Underutilisation, and Debt Growth

15 January 2025

The Auditor General's assessment of 98 Ministries, Departments, and Agencies (MDAs) showed that 47% of planned outputs were fully implemented, while 51% were partially implemented and 2% unimplemented.

The Auditor General, Edward Akol, has delivered a stark assessment of the country's financial management for the fiscal year 2023/24, highlighting significant gaps in budget execution, rising debt levels, and underperformance in key government programs.

The initial budget for the fiscal year was set at Shs52.7 trillion but was later revised to Shs61.4 trillion.

However, only Shs54.3 trillion was warranted, leaving an unfunded gap of Shs7.1 trillion, Mr Akol, who was handing over his maiden audit report to Deputy Speaker Thomas Tayebwa, said.

Even more concerning, the government spent only Shs47 trillion of the warranted amount, representing a major underutilisation of funds.

This, Akol noted, has had a negative impact on service delivery across government operations.

The Auditor General's assessment of 98 Ministries, Departments, and Agencies (MDAs) showed that 47% of planned outputs were fully implemented, while 51% were partially implemented and 2% unimplemented.

Local governments fared slightly better, with 69% of outputs implemented, 28% partially implemented, and 3% not implemented.

AG Akol pointed to the country's growing fiscal deficit, which stood at Shs16.1 trillion, down from Shs21.1 trillion in 2021/22, as an improvement but still a significant concern.

Domestic revenue, including grants, grew from Shs23.4 trillion in 2021/22 to Shs30.9 trillion in the year under review.

However, the government's expenditure also increased, rising from Shs44.4 trillion to Shs47 trillion.

Despite a slight growth in Uganda Revenue Authority's collections, the revenue target fell short by Shs1.9 trillion.

Debt levels also saw a notable increase, with Uganda's external debt rising by 2.2%, reaching Shs54.37 trillion.

While commercial bank debt decreased by 9.9%, and bilateral debt saw a modest decline, the Auditor General warned that the growing debt burden could compromise fiscal sustainability, limiting the country's ability to fund critical domestic programs.

Akol also addressed issues in key areas such as pension systems, the Parish Development Model (PDM), and procurement.

The pension audit revealed overpayments totalling Shs31.37 billion to over 3,600 pensioners across various MDAs and local governments, a problem exacerbated by policies like early retirement and pay increases for specific professionals.

He projected that pension liabilities could exceed Shs4.5 trillion annually by 2034 if not addressed.

In the PDM, which Parliament allocated Shs1.1 trillion for, Mr Akol noted significant progress, but also alarming gaps. Data collection and population registration were lagging, and accountability issues persisted.

Notably, Shs41.7 billion was disbursed outside the established management platform, breaching guidelines.

AG Akol urged Parliament to take urgent steps to address these financial challenges, stressing the importance of improving fiscal management to safeguard Uganda's economic future and ensure effective service delivery for its citizens.

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