Kampala. Government has said it will, in the 2019/20 financial year, prioritise the payment of all arrears due to local suppliers.
Speaking at the launch of Buy Uganda, Build Uganda (BUBU) policy in Kampala yesterday, Finance Minister Matia Kasaija, committed to pay all arrears due to local suppliers as a way of enhancing the BUBU policy.
“We are going to allocate money in the budget to pay off all the local suppliers because we know by delaying the money it is affecting your cash flow and that is not good,” he said in the presence of President Museveni.
Mr Kasaija also noted that government had made it policy not to carry forward any arrears as a way of promoting local businesses.
His commitment was prompted by the chairperson of Uganda Manufacturers Association (UMA), Ms Barbara Mulwana, who had earlier stressed that delay in payment by the government impacts the implementation of BUBU, a policy that seeks to promote local businesses.
“Government should speed up payment because it affects our operation. It takes between six to 12 months for local companies to be paid yet companies abroad are paid in time.”
Trade Minster Amelia Kyambadde, who presented a progress report on BUBU, also identified delayed payment of suppliers as a challenge, promising to ensure that it is solved for the smooth implementation of the policy, which she said it already paying off.
BUBU was launched in 2016 as way through which Ugandans are encouraged to promote local enterprises.
According to data from the Ministry of Finance, domestic debt, the bulk of which is owed to local suppliers, stands at Shs3 trillion.
Nearly Shs430b, according to a recent audit report from Ernst & Young, is paid to non-existent suppliers.
The audit was commissioned by government to ascertain the magnitude of the money owed to local suppliers.
As a result of the audit, it was found that supplies to government worth Shs427b cannot be accounted for yet it is part of the Shs3 trillion domestic debt.
This means that out of the current Shs3 trillion domestic debt incurred by government, nearly Shs430b could be deliberately inflated cost.