Overview:

The 2026 Auditor General’s report shows that payments amounting to Shs 46.8 billion were made to staff who were reabsorbed into government service — despite official guidance that reappointment constituted continuity of service and did not attract terminal benefits.

Kampala. What was billed as a bold cost-cutting reform to streamline government and reduce public expenditure is now under scrutiny after the Auditor General revealed that the Rationalisation of Government Agencies and Public Expenditure (RAPEX) has cost taxpayers hundreds of billions of shillings in disputed payouts, asset discrepancies, and unresolved liabilities.

The 2026 Auditor General’s report shows that payments amounting to Shs 46.8 billion were made to staff who were reabsorbed into government service — despite official guidance that reappointment constituted continuity of service and did not attract terminal benefits. A further Shs 30.4 billion was paid to retirees, with 20 former employees still awaiting settlement.

The most striking case involves the Uganda National Roads Authority (UNRA), which disbursed Shs 227.24 billion in severance packages — far exceeding initial projections and significantly eroding anticipated savings under the reform programme.

Reform with Big Promises

When Cabinet adopted RAPEX in February 2021, the objective was clear: streamline more than 150 semi-autonomous agencies, eliminate duplication, reduce recurrent expenditure, and ease mounting debt pressures now estimated at over 50 percent of GDP.

Anchored in the Public Finance Management Act, 2015, the reform required amendments to several laws and careful transition of staff, assets, and liabilities.

By December 2025, Parliament had passed 35 laws rationalising 40 entities. Of these, 23 agencies were dissolved, merged or mainstreamed into parent ministries, while 17 rationalisation processes remain pending.

However, the Auditor General’s review of eight selected entities paints a picture of costly and uneven implementation.

Out of 1,917 staff affected in the sampled entities, 1,492 were absorbed into other government institutions while 425 exited public service.

Yet, despite clear guidance from the Attorney General and the Ministry of Public Service that reabsorbed staff were not entitled to severance pay, 1,389 reappointed officers received Shs 46.8 billion. Additionally, 410 of the 425 retirees were paid Shs 30.4 billion.

Crucially, none of the rationalised entities had dedicated budgets to manage the transition. Payments were instead absorbed by successor ministries, raising concerns about fiscal planning, transparency, and adherence to legal advice.

The UNRA case stands out. The agency’s Shs 227.24 billion severance payout dwarfed projected savings of about Shs 39 billion per month, effectively delaying or neutralising expected fiscal gains.

Missing Assets, Mounting Liabilities

Beyond staff payments, the Auditor General flagged serious asset management gaps.

Tens of billions of shillings’ worth of discrepancies were identified between asset registers, handover reports, and closure financial statements. Several assets were omitted entirely from documentation. Only one of the reviewed entities conducted the mandatory Board of Survey during transition.

Land records were particularly problematic. Some parcels remain untitled, encroached upon, or under dispute.

Financial exposure is also significant. Rationalised entities disclosed receivables of Shs 475 billion and liabilities of Shs 932 billion, prompting warnings of potential losses if creditors pursue claims before verification and settlement processes are completed.

Political and Policy Debate

President Museveni has defended RAPEX, arguing that agencies such as UNRA and NAADS were created when ministries lacked capacity but have since outlived their usefulness. Mainstreaming their functions, he said, would restore discipline and accountability.

The Public Service Commission has advertised thousands of positions to strengthen absorbing ministries, with government insisting service delivery will stabilise once transitions are complete.

However, lawmakers have raised concerns that dissolving specialised agencies — particularly in sensitive sectors such as coffee, which supports an estimated 12.5 million Ugandans — could jeopardise international accreditation and livelihoods.

MPs including Dr Abed Bwanika (Kimanya–Kabonera) and Ms Lindat Auma (Lira District Woman Representative) argue that ministries may lack the technical capacity to immediately absorb specialised mandates.

Policy analyst Joseph Ochieno says the reform is attempting to fix a structural problem created by years of unchecked agency expansion.

“We don’t need redundant agencies,” he said, while questioning accountability for the earlier growth of government structures. He cited Uganda’s large Parliament of 559 MPs, an expanded executive, and persistent public sector vacancies as symptoms of broader structural imbalance.

The Advocates Coalition for Development and Environment (ACODE) Executive Director, Dr Arthur Bainomugisha, supports the principle of rationalisation but warns that inconsistent implementation risks undermining credibility.

“Rationalisation was a right move to curb duplication and corruption, but it got captured in Parliament,” he said, alleging political interference weakened the reform’s intent.

Reform at a Crossroads

With the FY2025/26 national budget exceeding Shs 72 trillion and debt pressures mounting, RAPEX was meant to signal fiscal discipline and reassure markets of government’s commitment to expenditure control.

Instead, the Auditor General’s findings suggest the reform faces credibility challenges. Legal guidance was inconsistently applied. Transition costs were inadequately planned. Asset management controls were weak. Liabilities remain unresolved.

Unless these gaps are addressed, what began as a cost-saving measure risks becoming another expensive restructuring exercise — one that delivers fewer savings than promised while exposing taxpayers to new financial risks.