Finance minister Lugolobi pushes for parliament approval to write off Shs2.3bn Kilembe Mines debt

The Government has asked Parliament to approve the write-off of Shs2.2974 billion in outstanding non-tax revenue owed by Kilembe Mines Limited, covering annual mineral rent arrears accumulated between 2018 and 2024.

State Minister for Finance (Planning), Hon. Amos Lugoloobi, together with technical officials, appeared before the Parliamentary Committee on Finance, Planning and Economic Development to present the request.

The debt comprises annual mineral rent arrears amounting to Shs2,297,400,000 that Kilembe Mines accumulated over the six-year period.

Presenting the request, Lugoloobi told the committee that the proposed write-off follows a recommendation by the Auditor General in the audit of the Ministry of Energy and Mineral Development for the financial year ended December 2024.

The Auditor General recommended that the outstanding annual mineral rent arrears owed by Kilembe Mines be written off.

The Ministry of Finance subsequently received a formal request from the Ministry of Energy and Mineral Development seeking approval to abandon the claim against Kilembe Mines and remove the outstanding amount from Government’s books.

Lugoloobi said the request had been brought before Parliament in line with the Public Finance Management Act, which requires parliamentary approval before Government can abandon or remit a claim or write off a loss or deficiency involving public money or resources.

He cited Section 33(1) of the Public Finance Management Act, Cap. 171, which provides that where the Minister of Finance seeks to abandon or remit any claim by or on behalf of Government, or write off a loss of or deficiency in public money or public resources, the Minister must seek Parliament’s approval.

“The request to write off Kilembe Mines debt has therefore been presented to you, Hon Chair and members of this committee, in accordance with the provisions of the Public Finance Management Act for your consideration,” Lugoloobi told the committee.

The request places the proposed debt waiver under parliamentary scrutiny, with the Finance Committee expected to assess the circumstances surrounding the arrears before making recommendations on whether the write-off should be approved.

The case also highlights the challenges surrounding the collection of mineral-related non-tax revenue, particularly annual mineral rents owed by mining entities.

Annual mineral rent is a payment associated with the holding of mineral rights and forms part of Government revenue from the country’s mineral resources.

For Government, the proposed write-off means foregoing Shs2.2974 billion in revenue that has remained outstanding for several years. For Kilembe Mines, approval of the request would remove the accumulated annual mineral rent liability covering the 2018–2024 period.

The parliamentary process is therefore expected to weigh the Government’s interest in recovering public revenue against the circumstances that led to the accumulation of the debt and the Auditor General’s recommendation for its write-off.

The request will now be considered by the parliamentary committee before any final decision is taken through the procedures provided for under the Public Finance Management Act.