The Civil Society Budget Advocacy Group (CSBAG) has raised alarms over Uganda’s inefficient loan management, financial irregularities, and escalating debt servicing costs, which are severely impacting the country’s economic stability. At a press conference held at their offices in Kampala, CSBAG’s Executive Director, Mr. Julius Mukunda, presented an analysis of the Office of the Auditor General’s (OAG) report, exposing billions lost due to poor financial management, underutilization of borrowed funds, and wasteful spending.
The report reveals that in the Financial Year (FY) 2023/24, undisbursed loans increased by UGX 1.890 trillion (12.95%) compared to the previous year. This inefficiency cost the government UGX 73.904 billion in commitment fees—penalties paid for failing to use borrowed money. Over the past six years (2018-2024), Uganda has wasted UGX 469.778 billion in commitment fees for loans that were never utilized.
Despite borrowing heavily, the government’s failure to use these funds for development projects has resulted in rising debt servicing costs. In FY 2023/24, 20.99% of Uganda’s domestic revenue was spent on debt repayment, a sharp increase from 17.72% in FY 2021/22. This is far above the 12.5% limit set by the Charter for Fiscal Responsibility (CFR), signaling that Uganda’s debt burden is becoming unsustainable.
Interest payments on debt have also surged alarmingly. In FY 2021/22, the government spent UGX 3.917 billion on interest payments, which increased to UGX 5.835 billion in FY 2023/24, reducing funds available for essential services like healthcare, education, and infrastructure development.
CSBAG’s analysis of the OAG report further exposes widespread financial mismanagement across government agencies and local governments. The report raises serious concerns over unaccounted-for payments amounting to:
UGX 4.13 billion from 11 District Local Governments (DLGs).
UGX 670 million from four Local Governments (LGs).
UGX 4.32 billion by the Electoral Commission.
UGX 4.7 billion by the Uganda Bureau of Statistics (UBOS).
In total, UGX 15.95 billion was diverted from critical services. This includes UGX 14.63 billion that was meant for pensions and gratuity in 19 Ministries, Departments, and Agencies (MDAs) and 36 Local Governments (LGs). Additionally, UGX 1.04 billion was irregularly diverted from the agriculture sector, while UGX 270 million from the Parish Development Model (PDM) funds was misused.
Another major concern raised by CSBAG is the government’s investment in private companies without following due diligence, transparency, or accountability. The OAG report reveals that a staggering UGX 930.53 billion was invested in private enterprises without proper procedures, exposing public funds to significant risks.
Key examples include:
UGX 723.40 billion given to Dei-Biopharma Ltd without a valuation report to determine the company’s actual worth.
UGX 207.013 billion invested in ROKO Construction Ltd preference shares before obtaining parliamentary approval.
An excess payment of UGX 117 million even after approval was granted.
Kenneth Asiimwe, an economist at CSBAG, noted that these investments highlight Uganda’s weak public financial management, where large sums of money are funneled into private companies without adequate oversight.
The OAG report also sheds light on the mistreatment of pensioners, with 5,649 retirees excluded from the payroll in FY 2023/24, while another 4,948 pensioners have been waiting for 1 to 20 years to be added to the payroll despite submitting the required documentation.
Pascal Muhangi, another economist at CSBAG, emphasized that the government’s failure to process pensions in a timely manner has left thousands of retirees struggling financially, despite their years of service to the country.
The report estimates that Uganda lost UGX 2.9 trillion in FY 2023/24, representing 5.5% of the national budget, due to inefficiencies such as:
Expired medical supplies – UGX 316.7 billion worth of medicines wasted due to poor stock management.
Idle farm equipment – UGX 758 million spent on agricultural equipment that remains unused.
Pension overpayments – UGX 11.39 billion paid in error.
Double benefits in government programs – Beneficiaries receiving funds from both Emyooga and the Parish Development Model (PDM) programs.
Overpayment for unfinished projects – UGX 2.7 trillion wasted on projects that remain incomplete.
CSBAG warns that unless these issues are addressed, Uganda’s economy will continue to suffer from resource misallocation and missed development opportunities. Redirecting these wasted funds could significantly improve service delivery in health, education, and infrastructure.
CSBAG also highlighted severe challenges in the agriculture sector, which is the backbone of Uganda’s economy. Kenneth Asiimwe pointed out two major concerns from the OAG report:
- Lack of professional certification among agricultural extension workers – None of the 2,561 recruited extension workers meet the certification requirements set by the Ministry of Agriculture, Animal Industry, and Fisheries (MAAIF) for the PDM program.
- Severe staffing shortages – Only 2,561 out of the required 5,874 extension worker positions have been filled, leaving a 57% gap in agricultural advisory services.
These shortcomings contribute to inefficiencies in Uganda’s agricultural sector, leading to massive post-harvest losses. According to the Food and Agriculture Organization (FAO), Uganda loses UGX 72 billion per season due to poor post-harvest handling.
CSBAG’s analysis of the OAG report paints a troubling picture of Uganda’s financial mismanagement. From inefficient loan utilization and rising debt servicing costs to unaccounted-for public funds, risky investments, and neglected pensioners, Uganda’s fiscal policies are failing its citizens.
Without urgent reforms, the country risks sinking deeper into debt, while critical sectors like health, education, and agriculture continue to suffer from underfunding. CSBAG urges the government to take immediate action to enhance financial transparency, improve public investment decisions, and eliminate wasteful spending.
Failure to address these issues will only further strain Uganda’s economy, limiting opportunities for growth and development while burdening future generations with an unsustainable debt load.
