Every year Rwanda Parliament approves loans and grants to finance the national development programs.
A loan agreement proposal is normally submitted by the Ministry of Finance (Minecofin), for approval in parliament and in most cases asks lawmakers to urgently approve the agreements.
The argument in that rush is in most cases, that the project benefits are desperately needed for Rwanda to attain the National Strategic Transformation (NST1) targets for 2024 and the extended vision 2050.
Currently Rwanda has a range of loans which have a repayment period of 20-30 years.
This has seen Rwanda’s total public debt rise from 39.8% in 2015 to 66% as of end of December 2020.
Minecofin figures show that the debt burden is sustainable, though debt management has been affected by Covid-19 to move from low to moderate scale- meaning that the risk of repayment can be slightly doubted considering the impact of the pandemic on the GDP.
With these issues at hand, a Parliament Public Accounts Committee (PAC) this Monday September 27, 2021 grilled the ministry of finance for failing to kick start the same projects which they requested for Parliamentary timely approval.
PAC showed that this delay has cost (in losses) tax payer’s money worth Rwf2.9billion paid as commitment fees out of the many delayed projects including the Rwanda Innovation Fund ( cost at $100million), the Rusizi III hydro power project (African Development Bank funded), Export Targeted Irrigation (funded by Exim Bank at $120million and currently stalled due to poor monitoring) among others.
The first question, Parliament asked is why does the ministry which oversees the loans repayment fail to kick start the project to the extent that Rwandans have to be victims of their own making.
“You come here asking us to quickly approve these loan agreements yet you are not ready to start implementing them. Do you know that this affects us and our future generations,?” MP Jeanne d’Arc Uwimanimpaye asked.
The MPs also wondered how lack of coordination between the ministry and other organs could for example cost government charges Rwf270M in one of the projects.
Marie Ange Ingabire, the Chief Budget Manager Minecofin tried to explain the importance of taking the loans at all costs and blamed the delays on contracted project implementers, lack of discussion with implementing organs and restructuring of the projects after the funds are available.
MPs Jean Claude Ntezimana and Christine Bakundufite, Alice Mutesi were irked by this response and wondered if the ministry does plan and conduct feasibility studies before coming to the chambers to present their requests.
“This is so sad to hear such an explanation. It is as if you just ask for money without a feasibility study and understanding of the project. Do you lack planning or skills?” MP Mutesi said and asked if Minecofin does this with conscious of the underlying charges.
Stella Nteziryayo, the Minecofin Director Public Debt said that they are aware but failed to convince Parliament how this is possible, in spite of the challenges of poor planning and coordination.
Assistant Auditor General in charge of Quality assurance and Audit development, Fidele Kayiranga, clarified that whatever the reasoning, the fact that government pays for projects which are below 0.5% implementation and many remain stalled is simply a wasteful expenditure.
PAC chairperson, Muhakwa said that Parliament is not satisfied with the Minecofin explanation on loan management and tasked to ministry to clean up its house and deliver as supposed to be.
“We are not satisfied with the response but we will follow up to make sure this is changed,” Muhakwa said in an interview with media.
The ministry was also grilled on implementation of an integrated financial management information system (IFMIS) which has taken up over Rwf21billion to install and implement.
It was disclosed that in the process the government lost Rwf5billion in trying to integrate 416 sector offices which by then didn’t have internet connection rendering the module useless thus abandoned on top of over Rwf200 million used in training the then users with no plan to disseminate the skills to others.
Placide Mukwende, the Minecofin financial systems development program manager stated that this was not a total loss because the sector module has been integrated into the Ifmis and progress evident in connecting 1200 entities from 716 since 2016.