15th January 2025
By,Isaac Senabulya

The Auditor General, Edward Akol has warned that if no reforms are undertaken in Government’s pension sector, Uganda taxpayers would be spending over Shs4Trn in pension and gratuity by 2034.
He issued the warning while handing over the 2023/24 Annual Auditor General’s report to Parliament where he said that Uganda’s pension sector that Gov’t over paid several pensioners to a tune of about Shs31.2Bn.

“The sustainability of our pension system faces mounting pressure from multiple fronts such as early retirement policies, allowing exits at the age of 45years, enhanced pay for science professionals among others. From my analysis I project a 12% annual increase in retirees over the next decade with pension liabilities exceeding Shs4.5Trn annually by 2034.
While handing over the report to Deputy Speaker, Thomas Tayebwa, Akol revealed that he conducted four thematic audits on areas including the Parish Development Model (PDM), Pension Payroll audit and management of procurements in Government but warned of the numerous challenges facing the pension sector, characterized by overpayment of beneficiaries.
“The pension system audit has revealed critical challenges that demand attention. I noted that 1502 pensioners were overpaid gratuity benefits of Shs22.3Bn. These overpayments were in 19 Ministries, Departments and Agencies (MDAs) and 115 Local Governments. In addition, 2193 pensioners were overpaid pensioner benefits by Shs8.9Bn and this was in 23 MDAs and 104 Local Governments,” noted Akol.
According to the Auditor General, in 2023/24, the Office had planned to undertake 3002 audits during the period under review but was only able to complete 2832 audits the balance of 170 audits are still ongoing. The completed audits include; financial audits which are 2506, value for money audits 29, Engineering audits 6, Information systems audit, Treasury Memorandum 13, international audits 5, Forensic special audits 256, classified audits 7.
The Auditor General also expressed concerns over the low absorption of funds in the national budget which he said is affecting service delivery noting, “For FY 2023/24, the initial budget was Shs52.7Trn, it was later revised upwards to Shs61.4Trn. however, only Shs54.3Trn was warranted leaving unfunded gap of Shs7.1Trn. even more concerning, of the warranted, only Shs47Trn was spent. This underutilization is impacting service delivery across Government Corporations.”

The Office of the Auditor General also raised alarm on the fiscal deficit within Government highlighting that while domestic revenue including grants has grown steadily from Shs23.4Trn in 2021/22, to now Shs30.9Trn in 2023/24, the expenditure has also increased from Shs44.4Trn to Shs47Trn.
“This has resulted into a fiscal deficit of Shs16.1Trn, though this has decreased from Shs21.1Trn in 2021/22,” remarked Akol.
The Auditor General also reported a growth in Uganda’s external debt by 2.2% rising from Shs53.19Trn to Shs54.37Trn, an increase he said is primarily driven by borrowing from multilateral creditors which has expended from Shs33.06Trn to Shs35.1Trn.
Akol also revealed that while Uganda has seen some positive trends notably a 9.9% reduction in commercial bank debt from Shs7.15Trn to Shs6.4Trn and modest decrease in bilateral debt, there is still a risk of compromising the fiscal sustainability and constrain the country’s ability essential domestic programs.
Comments