UGANDA

UGANDA
the banking sector, putting companies in a difficult situation, and more generally weighing on
business sentiment. We have undertaken an exercise to reconcile the stock of arrears from
internal audit and final accounts, by reviewing submissions from all government entities to come
up with a harmonized position. The data show that the stock of arrears was Ushs 1.4 trillion in
June 2014 and Ushsin June 2015, and, preliminarily, Ushs 2.7 trillion in June 2016. The increase
registered in 2016 is the result of some methodological issues—including the fact that some new
reporting entities were unable to provide figures for years prior to June 2016, including
universities and examination boards—and some other factors including (i) the formalization of a
commitment to pay pensions and gratuity for veterans, that could only be measured this fiscal
year, which accounts for nearly half of the increase in arrears; (ii) the increase in court awards and
compensation; (iii) outstanding commitments of National Medical Stores; and (iv) VAT arrears
amounting to Ushs 71 billion under the Ministry of Finance Planning, and Economic Development.
18. We have made progress on our structural reform agenda, though some items are taking
longer than we had hoped for. The Public Financial Management (PFM) Act regulations were
gazetted in June 2016. Although not the full level of detail could be included, treasury instructions
currently under preparation are expected to cover detailed aspects of financial management and
accountability processes. The Charter of Fiscal Responsibility has been presented to Parliament for
approval and contains clauses on the levels of the fiscal deficit and public debt consistent with
maintaining macroeconomic stability. We have finalized the Appraisal User Manual, which is
expected to be published and disseminated to all Ministries, Departments and Agencies by end-
December 2016, to help guide project preparation and appraisal (structural benchmark). In
addition, the Development Committee Guidelines have been updated, and will be published by
end-December, in order to help ensure compliance with the Appraisal User Manual (structural
benchmark). A cabinet memorandum on the principles for amending the BoU Act has been
prepared and will be presented to cabinet and thereafter to Parliament by March 2017 (structural
benchmark). The AML Amendment Bill 2016 which was submitted to the previous Parliament has
been re-published and recommitted to the new Parliament in October 2016 for discussion and
approval by end-December 2016. The Amended AML Act also contains provisions to address
deficiencies highlighted in the 2016 Mutual Evaluation Report, namely: adequately expanding the
scope of record-keeping requirements to apply to all financial institutions; and designating
supervisory bodies with necessary powers to enforce financial institutions’ compliance with
AML/CFT obligations, including proportionate and dissuasive sanctions. The Insurance Regulatory
Authority (amendment) Bill was recently resubmitted to the First Parliamentary Council before
being sent to the relevant Parliamentary Committee, and is also expected to be considered and
approved by Parliament by end-December 2016. The Anti-Terrorism Act has been amended to
properly criminalise the financing of terrorism and submitted to Parliament for its approval. We
will engage closely with Parliament to ensure a speedy passage by end-December 2016 (structural
benchmark).
INTERNATIONAL MONETARY FUND 33