Kampala, Uganda – August 9, 2025 — The Ministry of Finance, Planning and Economic Development (MoFPED) has announced a comprehensive three-year plan to clear the country’s domestic arrears, beginning in the current financial year 2025/26.
Under the strategy, government has earmarked Shs 1.4 trillion for the settlement of verified claims, with funds scheduled for release in the second quarter of this financial year — between October and December 2025 — following verification by an independent audit firm.
Speaking on the initiative, Permanent Secretary and Secretary to the Treasury (PSST) Ramathan Ggoobi stressed that the government is determined not only to pay off the outstanding arrears but also to prevent future accumulation.
“To curb further accumulation of domestic arrears, the Ministry will sanction Accounting Officers who create new arrears. This will also form the basis for non-renewal of their performance contracts,” Ggoobi warned.
The move is expected to improve liquidity for businesses owed by government, strengthen fiscal discipline across ministries, departments, and agencies (MDAs), and restore confidence among suppliers and contractors.
This marks one of the most decisive policy steps in recent years to address the long-standing challenge of unpaid government obligations to the private sector.
