Auditor General Edward Akol has sounded the alarm over Uganda’s pension sector, warning that without urgent reforms, taxpayers could face an unsustainable Shs4.5 trillion annual burden by 2034.
Akol issued this warning while handing over the 2023/24 Annual Auditor General’s Report to Parliament, highlighting systemic flaws in the pension system.
The report revealed that overpayments totaling Shs31.2 billion were made to thousands of pensioners, sparking concerns about the sustainability of the pension system.
“The sustainability of our pension system faces mounting pressure from early retirement policies, enhanced pay for science professionals, and other factors,” Akol explained.
He projected a 12 percent annual increase in retirees over the next decade, which could exacerbate the crisis.
In addition to the pension sector, Akol also flagged inefficiencies in budget absorption, highlighting that out of a revised budget of Shs61.4 trillion for FY 2023/24, only Shs47 trillion was spent.
This underutilization left a funding gap of Shs7.1 trillion, which Akol said has significantly hindered service delivery across government agencies.
The pension audit revealed that 1,502 pensioners across 19 ministries and 115 local governments were overpaid Shs22.3 billion in gratuity benefits.
Another 2,193 pensioners received excess payments of Shs8.9 billion, prompting Akol to note that “these irregularities reflect deep systemic challenges in financial oversight.”
The health sector also came under scrutiny, with government losses skyrocketing due to expired medical supplies.
COVID-19 vaccines, ARVs, and test kits worth Shs316.65 billion were destroyed in 2023/24, up from Shs33 billion the previous year.
“This represents a significant waste of resources that could have addressed pressing healthcare needs,” Akol said.
Mulago National Referral Hospital’s ICU operates at just 56 percent capacity due to staff shortages, with only 15 out of 27 beds functional.
Critical medical equipment remains unutilized due to a lack of trained personnel, further highlighting the need for urgent reforms.
Akol revealed that while the Ministry of Health requires Shs20 billion annually for equipment maintenance, it receives a mere Shs1.8 billion.
The Auditor General called for urgent reforms to address the inefficiencies in the pension sector, budget management, and healthcare system.
“Without immediate interventions, these systemic challenges will continue to erode public trust and waste vital resources,” Akol warned.
Deputy Speaker Thomas Tayebwa, who received the report, emphasized the need for Parliament to act swiftly on the recommendations to safeguard public funds and improve service delivery.
