Government is spending billions of shillings servicing loans whose proceeds are allegedly being misused or stolen by some local government officials, State Minister for Finance, Planning and Economic Development Amos Lugoloobi has said. Lugoloobi said the misuse of borrowed funds was undermining the country’s development efforts because the government is left with the burden of repaying loans while the money does not achieve its intended purpose.
He made the remarks on Monday at Mbale Resort Hotel during the Eastern Region Local Government Regional Budget Consultative Workshop for the 2027/28 financial year. The consultation was held under the theme, “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation and Broadening Services, Digital Transformation and Market Access.”
The meeting brought together local government officials from the Eastern Region, including Chief Administrative Officers, LCV chairpersons, planners, city clerks, district commercial officers, production officers and Resident District Commissioners. Lugoloobi said government borrows money every year to finance development programmes, including roads and agriculture, but alleged that some of the funds are diverted or stolen by officials at the local government level.
He said such practices not only undermine service delivery but also leave taxpayers with the responsibility of repaying money that has not been put to productive use. The minister urged local government leaders to ensure borrowed funds are used for their intended purposes and contribute to economic development. Local Government Minister Balaam Barugahara also raised concerns about the management of government funds in the Eastern Region.
Barugahara said his recent tour of several districts, particularly in Bugisu, had exposed what he described as widespread misuse of government resources by some district leaders. He said the problems were reflected in poor infrastructure and service delivery, despite government allocations to the districts. Among the issues he cited were illegal collection of fees in public schools, poor conditions in schools, roads and health facilities.
Barugahara specifically cited Bududa Hospital, where he said the maternity ward was too small to adequately serve the community. He urged district leaders attending the consultation to present their challenges to the Ministry of Finance so that they can be considered in the 2027/28 budget. Lugoloobi also directed his commissioner to take note of the challenges at Bududa Hospital for consideration during the next budgeting process.
Barugahara further announced that all Chief Administrative Officers across the country are expected to receive new double-cabin vehicles within two weeks to facilitate monitoring of government programmes and execution of their duties. The announcement followed concerns from local government leaders about inadequate resources for monitoring and implementing government programmes. The district leaders also asked the two ministers to increase the share of locally generated revenue retained by local governments.
They argued that allowing districts to retain more of the revenue they collect would give them additional resources to finance development activities, including road maintenance and administrative work. Emmaculate Ematu, the Ngora Resident District Commissioner, raised concerns about the recovery of funds under the Emyooga and Parish Development Model programmes. She said monitoring and recovery had become difficult because some beneficiaries claim the money was provided for political reasons and therefore should not be repaid. Ematu asked the ministers to provide guidance on how local governments should handle recovery of the funds.
The concerns were raised as the government begins consultations for the 2027/28 national budget, with local government leaders seeking additional resources and greater flexibility to address service delivery challenges in their respective districts-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
