Home Business & TechEconomy Mismanagement of Public Funds: Understanding the Loss

Mismanagement of Public Funds: Understanding the Loss

by Daniel Sabiiti
5:06 pm

The Rwf 3.2 billion mismanaged fund would contribute to the school feeding program

Rwanda’s success story in fiscal budget has been around narrowing the external dependency over the last three decades on a gradual basis, with the internally generated revenues covering more than 60 per cent of the budget today.

However, the Office of the Auditor General (OAG) reports show a concern of significant level of public funds mismanagement.

Going by the last three years from 2019 to 2022, the OAG reported  unsupported expenditure, partially supported expenditure, wasteful expenditure and funds diverted or fraudulently utilized.

Mismanaged public funds were Rwf3.2 billion in 2022 compared to Rwf5. 6 billion in 2020, down from Rwf8.6 billion in 2019. One may suggest that the numbers are being reviewed downward but the issue is still on “why should taxpayers’ money be taken for granted anyway?”

Members of Parliament think that this “wasted” money, if utilized well, would have created a bigger impact in various sectors of concern, especially in the education, agriculture, and health sectors which are priority areas of attaining targets of extended vision 2030 and 2050.

For example, the Rwf3.2billion “wasted” in 2021/2022 would have been used to cater for the school feeding program for 32,653 students in government schools or one egg per day for 250,306 pupils in pre-primary schools.

In the Schools Capitation grant the government provides funding for the school feeding program with a budget of Rwf8,775 per student per term which is 89 per cent of the total Rwf9,750 school feeding funding per term while parents contribute the remaining Rwf 975, equivalent to 11 per cent.

This same money could be used to solve the current problem of lack of lower primary textbooks for the subjects of Mathematics. The Auditor General report showed an insufficient availability of textbooks (English and Mathematics) for pupils and teachers in schools.

A single textbook cost Rwf1,625 which means that the wasted budget of Rwf3,200,723,068 could buy 1,969,675 books.

The 2022 AG’s report shows that where there were books for some of the subjects, the number was insufficient, and was shared by pupils at the ratio of 1:10 (1 book being used by 10 pupils) to 1:176 (1 book being used by 176 pupils).

“The unfavorable ratio leads to poor quality of education of pupils. There is a need for exploring ways of addressing this issue including partnership with the private sector,” the AG said.


Meanwhile, the government had planned to spend Rwf2. 8 trillion in the fiscal year (FY) 2018/2019 and in that period, the AG’s report shows that Rwf8.6 billion was classified as ” Mismanaged public funds”.

One of the areas that needed financing was Job creation: A total of 213,198 decent and productive jobs were targeted to be created through many strategic interventions such as providing toolkit loan facilities to 3,000 TVET graduates for self-employment.

A TVET graduates toolkit can be vital for one to start a small business after graduating.

For instance, one may need mechanic tools that can be used to start up a small repair shop. On the online local market (Ihaha.rw), a POPULO Rotary Tool Kit with 107 Accessories and Flex Shaft (Toolkit) cost Rwf214,546.

This means that the ‘wasted’ Rwf8.6billion would have bought toolkits for 40,112 graduates for the three years considering the current enrollment of 13,172 as of this year.

With electricity access in households currently at 73%, this also means the graduates could start small businesses across the countryside thus contributing to the government’s target of creating 1.5 million jobs by 2024 and a middle income knowledge based economy.

How about the Rwf 5.6 billion loss in 2020/2021?

In FY2020/21 Rwf5,664,068,116 was declared as “wasteful expenditure”.

However, the government had planned improved health services, social protection and poverty eradication interventions focused on enabling graduation from extreme poverty and targeting beneficiaries based on household profiling.

Some of the key interventions prioritized were to purchase 6,363 cows under One Cow per poor Family (GIRINKA Program); provide direct support and construct 1,067 houses for needy genocide survivors.

A hybrid cow costs Rwf500,000 average. If this amount was used to buy a cow per family in Rwanda, there would be 11.2 million cows to offer and each family would not own one cow but 4.

The one cow per family could benefit from the mismanaged funds. Credit Photo MINAGRI

During the summons last month, Parliament Budget Committee vice chairperson, MP Angélique Nyirabazayire last month suggested that despite the decline in wasteful expenditure there is a general reluctance and intentional breaching of contract and tender laws.

“We see the biggest of this to be total negligence and not abiding by the legal frameworks when procuring a tender and implementing project activities,” Nyirabazayire said.

MP Pierre Claver Rwaka, argues that for some years there has been a tangible change in the way budget funds are mismanaged however this is not enough to explain why funds are not properly used.

“This is a managerial issue of failure to assess, follow up, and evaluate progress made and if we can address it, then funds will be used effectively,” Rwaka said.

Besides mismanaged funds, the AG’s reports also show that some funds intended for socio-economic development remain idle in designated accounts.

Public Accounts Committee (PAC) Chairman, MP Valens Muhakwa says that the committee has no authority to take administrative action on responsible officials, but submissions of possible prosecution cases are recommended to the responsible organs.

These include: the Ministry of Justice, National Public Prosecution Authority, Rwanda Investigation Bureau which are also part of the PAC hearings.

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