BOU's Atingi-Ego calls for expedited settlement of govt supplier debt

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The Central Bank is engaging all stakeholders, including the Ministry of Finance, to expedite remedial action for unpaid suppliers to the government.

Bank of Uganda Governor Michael Atingi-Ego stated on Friday that a verification process for suppliers is currently underway. The bank says it has requested a faster process to provide relief to affected businesses.

"We've been in discussions with the Ministry of Finance about this issue, as we are also concerned about the stability of the financial sector. If instability arises because some borrowers have not repaid their loans, it affects us all," he said.

Atingi-Ego made these remarks during the Musevenomics conference at Mestil Hotel in Kampala on Friday.

Recent media reports indicate that the government owes an estimated 12 trillion shillings to suppliers, which includes around 1.3 trillion shillings owed to suppliers in the road sector.

At least 200 billion shillings has reportedly been allocated in the 2025/2026 national budget to address supplier payments.

The Bank Governor acknowledged that  one reason interest rates are high is due to delays in payments leading to an increase in non-performing loans.

"Many government suppliers approach banks with invoices for goods supplied to the government. They request funding for working capital, and while they provide the goods, they often don't receive payment. Consequently, they are unable to repay the banks through no fault of their own. It is essential that we address the issue of domestic arrears head-on."

During the event, Atingi-Ego expressed his awareness that the government is working to increase the funds allocated for repaying suppliers.

"I am not sure of the exact amount in the budget, but it is my understanding that it is considerably higher than this year's budget. We will have to wait and see the final figures," he said.

Musevenomics is a comprehensive and adaptive approach to economic management adopted by various government agencies, aimed at revitalizing the economy after declines experienced during previous regimes before the National Resistance Movement (NRM).

The conference, organized by the Uganda Development Forum (UDF) and the Uganda Development Corporation, in partnership with other key government institutions, is themed “Sustaining Musevenomics: Navigating Uganda’s Economic Future in a Disrupted World.”

This two-day event that took place on Thursday and Friday was particularly timely as Uganda progresses through its Vision 2040 blueprint.

The country is also launching its Fourth National Development Plan (NDP IV), which aims for a tenfold increase in GDP, from 50 billion dollars to 500 billion dollars.

The event attracted speakers and delegates from the Ministry of Finance, the National Planning Authority, the Bank of Uganda, and civil society organizations. These participants explored the principles of Musevenomics within the context of current global disruptions.

The primary goal is to create a shared understanding of Musevenomics and its real-world applications in modern Uganda.

Specifically, the conference aimed to enhance appreciation of Musevenomics and its historical contributions to Uganda's economic development, assess its relevance amidst global shifts such as climate change, digitalization, and geopolitics, and develop actionable policy recommendations to accelerate Uganda’s socio-economic transformation.

The conference included thematic and participatory sessions, featuring expert paper presentations, panel discussions, case studies, and media storytelling.