A detailed review of the latest Auditor General’s report reveals a widening gap between headline fiscal recovery and the underlying reality of Uganda’s domestic debt.
While the national statement of financial position shows a drop in total payables, closer analysis indicates that much of the reduction results from debt restructuring rather than actual settlement.
Total payables reportedly fell from UGX 13.8 trillion last year to Shs8.4 trillion in the current period, a decrease of Shs5.4 trillion.
However, this apparent improvement was largely achieved through a balance-sheet adjustment: a temporary advance of Shs7.78 trillion from the Bank of Uganda was converted into 10-year Treasury Bonds.
By turning a short-term, reimbursable obligation into long-term debt, the government removed it from the immediate “payables” category, creating the appearance of fiscal health.
When the BoU debt conversion is excluded, the underlying trend tells a different story. Despite cash payments of Shs0.265 trillion during the year, the true volume of payables actually increased by Shs2.36 trillion.
The Auditor General highlighted two systemic failures driving this accumulation: government entities continuing to incur obligations beyond approved budgets, bypassing the commitment control system, and inadequate record-keeping that makes it difficult to track the full extent of debts owed to suppliers and contractors.
In response, the Auditor General has called on government to move beyond accounting maneuvers and implement stricter central recording.
Officials are urged to fully utilize the Integrated Financial Management System (IFMIS) to track every outstanding commitment at the close of the financial year.
Failure to address these structural issues, the report warns, could undermine fiscal transparency and pose long-term risks to Uganda’s debt management and service delivery.
