The government is drowning in a deep well of unpaid water bills, with arrears surpassing sh100 billion.
The National Water and Sewerage Corporation (NWSC) is gasping for financial relief as various Government Ministries, Departments, and Agencies (MDAs) continue to consume water without paying up.
NWSC led by the Managing Director, Silver Mugisha petitioned Parliament for urgent intervention and the matter was tabled on Tuesday this week before a joint session of the Finance and Natural Resources committees, chaired by Amos Kakunda (Rwampara County) and Herbert Ariko (Soroti Municipality).
Leading the list of defaulters is the Ministry of Defence which owes sh30.68 billion, while the Uganda Police Force (UPF) follows closely behind with sh24.68 billion and Uganda Prison Service (UPS) with sh19.44 billion.
Beyond the security agencies, ministries are equally guilty with the Ministry of Agriculture at sh89.4 million, the Ministry of Gender sitting on a sh413.8 million debt, while the Office of Prime Minister is at sh9.51 million debt and state House at sh292.1 million.
Regional hospitals are among the worst-hit institutions in the water bill crisis, with some facilities accumulating debts in the billions. Mulago Hospital leads the pack with a sh7.8 billion in unpaid water bills, followed by Jinja (sh5.3 billion), Mbarara (sh685.4 million), Soroti (sh594.1 million), Fort Portal (sh432.1 million), Masaka (sh346 million), Hoima (sh120.6 million), and Mbale (sh193.8 million).
Some facilities have even gone years without clearing their water bills, Nebbi Hospital, with a debt of sh864.3 million, has not paid for over 94 months, while Gulu Hospital (sh919.7 million) has gone 36 months without clearing its dues.
Mityana Hospital (sh1.1 million) has also failed to pay for 94 months, and Tororo Hospital (sh77.9 million) has defaulted for 30 months. Even Entebbe Regional Hospital owes sh772.95 million, having gone 37 months without payment.
NWSC Suffocating as unpaid water bills rise
Despite repeated pleas from NWSC to clear these debts and even a directive from President Yoweri Museveni in September 2022, the arrears have continued to pile up. As of September 2024, the total stood at sh97.4 billion, but it has since crossed the sh100 billion mark.
The repercussions are devastating because NWSC relies on government institutions for 15% of its monthly revenue, but with non-payment becoming the norm, the corporation has been left gasping for financial oxygen.
The corporation expects to bill Government institutions sh85.6 billion in the current financial year 2024/2025 compared to the approved budget of sh61.75 billion. It is clear therefore that the budget for water bills doesn’t fully cover their consumption and arrears will continue to accumulate.
This shortfall has hindered its ability to expand water access across Uganda, a crucial government manifesto commitment. Instead of fulfilling its goal of 100% water service coverage, NWSC is now struggling to stay afloat.
VAT Woes: Paying taxes on money never received
The financial nightmare doesn’t end there, the tax laws require NWSC to pay Value Added Tax (VAT) on invoices issued even if the payments are never received.
So far, the corporation has already paid sh14.9 billion in VAT on arrears amounting to sh97.44 billion. This cash flow constraint has crippled NWSC’s ability to pay its own suppliers, with outstanding creditor obligations skyrocketing to sh161.9 billion.
Sundry creditors alone, including major suppliers like Pan Africa Chemicals Ltd (sh12.16 billion), Oriental Business Group (sh6.74 billion), Roofings Ltd (sh4.4 billion) and Tasco Industries Ltd (sh5.08 billion) among others, are pressing for payments.
MDAs speak out on mounting unpaid water bills
The parliamentary committees invited security agencies the next day on Wednesday to explain the dire situation of unpaid water bills, as they remain the largest defaulters.
Documents seen by our reporter reveal that at the start of the 2024/25 financial year, the Ministry of Defence had outstanding NWSC bills totaling sh27.86 billion, of which sh6.17 billion was carried forward from 2022/23.
Despite efforts to reduce the debt, the ministry has only managed to pay sh8.65 billion so far and is in the process of clearing another sh4.8 billion across the third and fourth quarters, which will reduce the outstanding balance to sh14.4 billion. However, Undersecretary Edith Buturo and Logistics Officer Francis Ngabirano Kahiriita acknowledge that managing these utility bills remains an uphill task.
“The ministry is still accumulating unpaid water bills even as it clears arrears. This financial year alone, our estimated consumption is sh21.9 billion, meaning that by June 2025, our total unpaid bills will rise to sh36.3 billion,” a brief from the ministry states.
Kahiriita attributes the persistent shortfalls to budget constraints, pointing out that while the ministry is allocated sh12.7 billion annually for water, its actual consumption is around sh27 billion. The problem has been compounded by rising NWSC tariffs and increased water usage due to the expansion of Uganda People’s Defence Forces (UPDF) installations.
“The tariffs have increased from sh3,558 per cubic meter in FY 2021/22 to sh4,274 per cubic meter in FY 2024/25, representing a sh716 per cubic meter increase,” he explained. The ministry plans to develop its own water sources and supply network in peri-urban and rural areas, in line with President Yoweri Museveni’s directive, but this remains a long-term challenge.
Unpaid water bills by the Police
The Uganda Police Force is facing a similar predicament, with unpaid water bills amounting to sh24.139 billion at the end of the last financial year. This debt is projected to grow by sh7.142 billion in the ongoing fiscal year. Undersecretary Aggrey Wunyi attributes the problem to high water consumption driven not only by police personnel but also by the thousands of civilians who visit police facilities daily.
“To begin with, our water consumption goes beyond staff needs. Every day, we receive an average of 4,000 visitors at police stations across the country. Of these, 2,700 are detainees, and another 1,300 are people visiting them. All these individuals use water from NWSC,” Wunyi explained.
He further noted that aged infrastructure is a significant contributor to the crisis. “Many of our buildings are very old, and the plumbing systems are highly dilapidated, leading to numerous leaks and wastage. However, budget constraints have prevented us from carrying out the necessary repairs,” he added. Fire outbreaks that require police intervention have also driven up water consumption.
Currently, the UPF has a workforce of 47,951 officers, with new recruits set to increase this number to 51,406. Out of these, 44,200 officers reside in police barracks countrywide, along with their immediate family members, bringing the total number of dependents to approximately 195,289 people. All these individuals rely on NWSC water.
Unpaid water bills by Prisons
The Uganda Prisons Service is also among the largest defaulters, with total arrears of sh164.2 billion, of which sh18.2 billion is owed to NWSC alone. Deputy Commissioner General Samuel Akena admitted the crisis, attributing it to rapid prison population growth that has not been matched by budget increments.
“As of today, we have 266 prison units, 13,944 staff, and a staggering 79,280 prisoners. This is the main reason for the continued accumulation of arrears,” Akena said. “Prison operations have been growing at an average rate of 8% per year, yet our budget has remained stagnant over the last seven years. Over this period, the prison population has grown by 50%, but our water provision remains fixed at sh7.045 billion annually.”
Natural Resources Committee Chairperson Herbert Ariko (Soroti East, NRM) described the situation as alarming, warning that it could destabilize NWSC, one of the most consistent and profitable public enterprises.
“This is one of the few state-owned enterprises that has remained financially sustainable. Unlike many other agencies, NWSC has not had to rely on Parliament for budget support to pay suppliers or clear debts. If this crisis continues, it could severely affect its operations,” Ariko cautioned.