Loan conditions derail Rwf82bn TVET project

A $81 million (about Rwf82 billion) project that would be financed by the loan from the Export-Import Bank of India (Exim Bank) has not yet started five years after the loan agreement was signed between Rwanda and the financier. The project is part of the ongoing government efforts to improve the quality of technical education through scaling up technical skills—which are considered to be crucial to reducing unemployment, poverty and enhancing social development. It was expected that the project would be completed by the end of next year (2023). Rwanda TVET Board (RTB) Director General, Paul Umukunzi told lawmakers on Monday that the nature of the project itself makes it very difficult to implement. “This project has impediments, because constructing those schools has to be only done by Indians, and 75 per cent of all the materials needed in the project should be sourced from India,” he said, indicating that it is a major issue that it has not yet been executed five years after the agreement to implement it was reached. During the budget hearings with the National Budget and Patrimony committee, officials from the Ministry of Education and RTB told the lawmakers that the project has stalled because of the very demanding loan. The delay of the project was flagged in the report by the Auditor General, which was recently tabled before parliament. Now, the officials said that the project was being revised as an attempt to put to use these funds. The $81 million credit line which was signed between the two parties in 2017 was meant to finance the establishment of 10 vocational training centres and four business incubation centres, respectively in ten and four districts. However, by the time of audit in March 2022, the planned activities had not yet been executed. The loan disbursed as at 30 June 2021 was $172,700 (representing 0.21 per cent) while over $80.8 million (representing 99 per cent) remained unwithdrawn. Implications of delay Consequently, the Auditor General’s report said, the delay in implementation of project planned activities deprives the country of necessary infrastructure for Technical and Vocational Education and Training. Umukunzi said that the rise in prices on the market [for goods and services] is also aggravating the situation. This, he indicated, is leading to the revision of the project scope, which implies the money could do less than what it could initially do. Revising the scope, he said, after factoring in the current market prices, means that they will construct at least seven TVET schools [vocational centres], and two incubation centres, which are fewer compared to those planned for before. This is an example of how delays in project implementation have impacts including the increase in costs and inefficiency in public funds management, legislators complained. Going forward, Umukunzi said that once the lender has approved the new scope, Indian companies will compete for the tender, pointing out that they expect to get those firms by the end of August this year. Also, he said that they expect that by the end of November this year, one or two Indian firms will have been contracted to implement the project. “But, still, there is still a challenge that 75 per cent of the goods and services have to be imported from India,” he said, seeking advocacy from MPs on this term so that it gets eased. MP Omar Munyaneza, Chairperson of the National Budget and Patrimony Committee said that apart from the TVET project under the Ministry of Education, similar cases were observed in projects that secured India Exim Bank loans under other ministries such as the Ministry of Infrastructure and the Ministry of Agriculture and Animal Resources. It is to note that the $66.6 million Base-Butaro-Kidaho road (as an infrastructure project in Northern part of Rwanda), and the $100 million project to develop three irrigation schemes – Warufu, Nyamukana and Mugesera, also stalled because of the same factor. The Warufu irrigation site is located in Gatsibo District, Nyamukana in Nyanza District and Mugesera in Ngoma District. “I think it is our responsibility as MPs to discuss with the finance ministryso that we consider ways the [financing] agreements that are signed no longer become a hindrance to these project implementing entities,” he said.

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Loan conditions derail Rwf82bn TVET project