Rwanda: Public Investments Ministry Will Reduce Losses – Auditor General

Auditor General Alexis Kamuhire has backed the creation of the new Ministry of Public Investments and Privatisation, saying that it will benefit Rwandans through ensuring that Government ventures yield expected returns.

He made the observation on Thursday, August 4, during an exclusive interview with The New Times.

On July 30, Rwanda announced the creation of the Ministry of Public Investments and Privatization with Eric Rwigamba as its minister. Before this appointment, Rwigamba was the Director General in charge of Financial Sector Development in the finance ministry.

The new ministry will focus on public investments that are profit- oriented, according to a brief released after the announcement.

Its key responsibilities include, among others; identifying opportunities for government investment, monitoring performance of the existing government investments in various companies and implementing privatization of public investments where necessary.

Kamuhire said that there are areas where the Government made investments with the aim of making profit, and for Rwandans in general to benefit from such ventures.

“As His Excellency (President Paul Kagame) put it, ideally the responsibility of the government is generally not to do business; the government makes investments and then privatise them so that the private sector can further utilise them. So, the Ministry will help in this regard,” he said.

He added that the development will address many issues related to public investments including making studies before committing public funds and monitoring.

Avoiding losses

Regarding areas where the new ministry should focus in terms of ensuring efficiency and profitability of public investments, he said that there are [public] entities that the Office of the Auditor General audited, and found that they made losses, suggesting that such losses should be prevented.

“I think it would be a good occasion to consider what to do to address such losses. This Ministry will follow on that,” he said.

“If there is an area where a loss has been incurred, what caused it? Should we bring in the private sector for a joint venture, or should we continue to work on that alone as the Government,” he said of the possible questions that the Ministry should consider.

Normally, he said, the responsibility of the Government is not to do business, rather to support investors.

“So, I would say that it is coming to further support the private sector to make investments into profit-making ventures, and make decision on privatising ventures into which the government invested but are not performing well so that investors can run them in a private sector-oriented way,” he observed.

There are cases of government ventures that do not perform well, and the Government decided to privatise them, sometimes losing money in the process.

One of them is the Burera Dairy. According to the Office of the Auditor General’s report for the fiscal year 2019-2020, the Ministry of Finance and Economic Planning on March 21, 2018, approved the privatisation of all Government shares held in Burera Dairy – located in Burera District. The previtisation, according to the Auditor General’s report, was due to the failure to operationalise this dairy.

As part of the implementation of this decision, on December 18, 2019, the National Industrial Research Development Agency (NIRDA) and the Business Development Fund (BDF) sold their 548,970 shares – initially worth over Rwf548.9 million – to an investor for Rwf270 million.

The investor is African Solutions Private Ltd (Afrisol), a Zimbabwean agro-processing firm.

This, the report indicated, resulted into a loss of over Rwf278 million.

Meanwhile, the Ministry of Trade and Industry told Parliament in October 2021 that after this factory sale, its performance improved whereby it moved from processing 500 litres of milk per day to 2,000 litres per day, implying that it quadrupled production.

The ministry pledged to help struggling Government-owned Community Processing Centres (CPCs) with business plans and marketing strategies in order to turn around their dwindling fortunes before being privatised.

In a bid to spur rural economic growth, the Government invested some Rwf4 billion in the setting up of six CPCs in six districts.

They include Nyabihu Potato CPC in Nyabihu District, Burera Dairy in Burera District, Rwamagana Banana Wine in Rwamagana District, Nyanza Ceramics in Nyanza District, Rutsiro Honey in Rutsiro District and Gatsibo Leather in Gatsibo District.

Audits revealed that the CPCs were established without carrying out a needs assessment and business plan, as well as a study on the required technology and equipment.

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