Uganda fined Shs342m daily for unpaid Unra projects

Top officials at the Uganda National Roads Authority (Unra) have told legislators on the Finance Committee that the country incurs a daily fine of at least Shs342m for government’s failure to pay contractors.

The Unra team led by the executive director, Ms Allen Kagina, said the challenge largely impacts other projects since money is siphoned from them to clear such debt.

“Interest is growing daily at Shs342m that is today and as the debt increases, this figure grows,” Ms Kagina told MPs who were yesterday inquiring into the impact of cash limit for the half year performance for the FY2022/2023 budget.

The Unra Director of Corporate Services, Ms Edna Rugumayo, said the interest rates oscillate between 15 percent and 20 percent.

Ms Rugumayo added that as of September, Unra established that the interest rate stood at Shs302m per day but this debt has since expanded from Shs528.502b at the end of FY2021/2022 to now Shs848b as of November.

“The arrears’ position has increased by more than 140 percent from Shs215b in 2020/2021 to Shs528b at the end of 2021/2022 because every year, we are getting less funding so that when we end with arrears each year, the first quarter almost entirely goes to paying the previous year’s debt,” Ms Rugumayo said.

She also cautioned that in the event that government fails to provide money to settle the debts, other works would stall.

“We have halted the signing even though procurement is completed because of the squeeze in cash,” Ms Rugumayo said.

Lawmakers want to the Minister for Finance to appear before their committee to provide details on why debt is not settled on time.

“We must be sincere to ourselves as government and appreciate that this is what is available and come out with open hands, plan and use that effectively,” Mr Amos Kankunda (Rwampara County) said.