The government is currently working to mobilize funds to settle outstanding arrears owed to contractors under the Ministry of Works and Transport (MoWT), totaling approximately UGX 500 billion. Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PSST), reassured the contractors that the payments would be made within the current financial year.
During a meeting with MoWT contractors on Thursday, February 27, 2025, PSST Ggoobi explained that the accumulation of these arrears was primarily due to poor planning and budgeting. He emphasized the government’s commitment to resolving the issue promptly and ensuring that contractors receive the payments they are owed.
“The cause of these accumulated arrears was poor planning and budgeting, which is now being addressed. This will not re-occur effective next financial year 2025/26,” he said.
He assured the contractors that government has now put in place measures to prevent such financial mismanagement.
“We are enforcing strict budgeting discipline to ensure that all commitments made are backed by actual resources,” he stated.
The Permanent Secretary of MoWT, Waiswa Bageya, who was present at the meeting, informed the contractors that the ministry had fully assumed the functions that were previously handled by the Uganda National Roads Authority (UNRA), the entity that had contracted them.
“MoWT is now fully responsible for these contracts, and we remain committed to ensuring that all obligations are met,” Bageya affirmed.
He commended the contractors for their patience and contributions to infrastructure development.
“Despite the delays, you have continued to deliver on your contracts, and for that, we appreciate your dedication,” he added.
Ggoobi further noted that in some cases, contracting had not been properly executed, leading to government commitments without available funds.
“Government was committed without money in the budget, and multi-year commitments were not being protected,” he stated.
He requested contractors to waiver penalties and charges to facilitate the settlement of all pending certificates , and advised them to avoid signing contracts without confirmed budget allocations.
“I appeal to you to be cautious and ensure that every contract you sign has financial backing to avoid future delays,” he emphasized.
The Uganda National Association of Builders, Suppliers, and Engineering Contractors, in a joint statement signed by their President, Kiara Binta Nkuranga, highlighted the negative impact of delayed payments on the construction sector.
“We urge the government to fast-track the payments so that contractors can meet their obligations to financial institutions and suppliers,” the statement read.
This development follows a petition by local contractors to the Parliamentary Committee on Physical Infrastructure, accusing UNRA of failing to clear outstanding arrears since 2021.
