Parliament tasks PSST Ggoobi to explain spike in domestic debt

PSST Ramathan Ggoobi seated with Accountant General Mr
Ssemakula while meeting Parliament

The PAC chairman Muhammad Muwanga Kivumbi tasked the Ministry of Finance to furnish it with details of all accounting officers that could have signed agreements with entities which they think ‘supplied’ hot air to the government, causing the ballooning of the debt by an astounding UGX 2.8 trillion in one year.

This happened on March 19, 2024, as the PAC committee examined an audit query in the Auditor General’s Report for financial year ended June 2023 which indicates an increase of the domestic arrears from UGX 8 trillion from 2022 to UGX 10.8 trillion in 2023.

Members on the committee asked the Permanent Secretary Ramathan Ggoobi to explain the worryingly rising trend of domestic arrears.

In response, Ggoobi indicated that out of the UGX 10.8 trillion only UGX 2.7 trillion shillings of the domestic arrears for government suppliers were verified which lawmakers vehemently rejected.

Xavier Kyooma, representing Ibanda county, tasked the Ministry of Finance team to explain how the unverified figures worth trillions of shillings ended up in the ministry’s financial statements. He further expressed fears that clearing of these unverified domestic arrears could have serious financial loss to the government.

Ggoobi vowed to address the failure to pay the suppliers to the government by accounting officers. He also committed to put an end to the unverified figures, some of which he said, stem from illegal agreements signed between the accounting officers and government suppliers.

Silas Aogoa, MPfor Kumi Municipality demanded that the Ministry of Finance should avail the list of the different accounting officers that engaged in illegal agreements with entities contributing to the ever-rising domestic arrears.

The Deputy Vice Chairperson Gorreti Namuga stressed that as Ggoobi presents the evidence to the committee, the domestic arrears under Statutory Obligation should be segregated, because some of the arrears are for pensioners.

Namugga, also the Mawogola County South MP, criticized the small budgetary allocation of 200 billion shillings for domestic arrears, saying the delay of payment of pension arrears is very unfair.

Meanwhile Basil Batarigaya, Kashari North MP said with such a small budgetary allocation it would take years to clear the entire UGX 2.7 trillion shillings. Batarigaya expressed concern that failure to clear these payables causes financial distress to the suppliers to the government who also operate using loans from local commercial banks.

He suggested that the government should consider getting a concessional loan with low interest to pay off the 2.7 trillion once and for all in order to rejuvenate the distressed entities that supplied the government which will subsequently help the economy to recover.

Relatedly the committee chairperson Mohammed Muwanga Kivumbi clarified that the National Debt currently stands at UGX97.4 trillion and not UGX 89.6 trillion shillings as earlier portrayed by the Finance Ministry.

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