A group of former contractors working under the Uganda National Roads Authority (UNRA) have announced plans to sue the government over unpaid arrears amounting to UGX 500 billion. The contractors, who were engaged under the Ministry of Works and Transport (MoWT), argue that the delayed payments have severely impacted their businesses.
Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PSST), assured contractors that the government is in the process of mobilizing funds to clear the outstanding debts within the current financial year. Speaking at a meeting with MoWT contractors on February 27, 2025, Ggoobi attributed the backlog to poor financial planning and budgeting, which he said the government is now addressing.
“The accumulation of these arrears was due to budgeting inefficiencies. We have put measures in place to ensure this does not happen again in the next financial year 2025/26,” he stated.
He further emphasized that the government is enforcing stricter financial discipline to ensure all contractual obligations are supported by available resources.
Waiswa Bageya, the Permanent Secretary at MoWT, informed contractors that the ministry had officially taken over responsibilities previously managed by UNRA. He reassured them that efforts were underway to settle the debts and prevent similar delays in the future.
“MoWT is now overseeing all these contracts, and we are committed to meeting our financial obligations,” Bageya said. He also commended the contractors for their patience and contributions to national infrastructure development.
Ggoobi pointed out that, in some cases, contracts were signed without guaranteed budget allocations, leading to financial shortfalls.
“There were commitments made without corresponding funds in the budget, which led to delayed payments. Moving forward, we will ensure that all multi-year contracts are backed by actual financial resources,” he noted.
He urged contractors to consider waiving penalties and interest charges to facilitate faster payment processing. Additionally, he advised them to verify financial backing before signing future contracts to avoid similar challenges.
The Uganda National Association of Builders, Suppliers, and Engineering Contractors, in a statement signed by its president, Kiara Binta Nkuranga, warned that the delayed payments were destabilizing the construction sector.
“We call on the government to expedite these payments so that contractors can fulfill their financial obligations to banks and suppliers,” the statement read.
The standoff comes after local contractors petitioned the Parliamentary Committee on Physical Infrastructure, accusing UNRA of failing to clear outstanding debts since 2021.
