Suppliers in dilemma as pending bills hit Rwf20b

Thursday January 16 2020


According to the Ministry of Local Government, a big chunk of the money government owes to the different people came as a result of expropriation for road construction and electrification. PHOTO | CYRIL NDEGEYA.  

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The government is on the spot once again over delays in payments to its service providers as pending bills hit Rwf20 billion.

This came to the fore at the annual National Dialogue, where suppliers and service providers raised concerns.

Among the affected are small private companies, like Vision 2020 association, whose members render their services through VUP Umurenge programme.

“We have now gone for four months without pay,” said Simon Sebikino, a beneficiary of VUP in Butaro sector of Burera district. Under the VUP programme, a public works beneficiary earns Rwf1,000 a day while poor households meant to get Rwf3,000 in direct monthly support every 10th of the month, have also not been paid.

Although the government allocated Rwf45.3 billion for VUP in the 2018/19 financial year to cover 293,000 people,the Rwandan Governance Board survey conducted in the Western, North and Eastern provinces, indicates that a huge chunk of this money is either lying idle or was misappropriated by Saccos.

The report shed light on over Rwf6 billion worth of loans requested by VUP beneficiaries but have not been serviced while over Rwf2 billion was found lying idle in Saccos instead of being dispensed to the beneficiaries’ accounts.


In addition, the board survey revealed over Rwf2 billion has been embezzled through poor management of the SACCOs. According to the Ministry of Local Government, a big chunk of the money owed came as a result of expropriation for road construction and electrification.

An official at the Ministry of Local Government, who preferred anonymity, said the biggest share of these arrears were accumulated by the central government not the local government, and that they accumulate mostly when government undertakes rapid infrastructure development.

“This pool of arrears owed by government builds from a wide range of issues, you find some peoples crops were destroyed by animals in the national park.

This comes to the central government and we never know about it.” The delayed payments and disbursements will also affect government plans to extend some of the VUP services from the current 244 sectors to 416.

According to Minister for Local Government Prof Anastase Shyaka, of the 100,000 people who submitted their business projects requesting loans, only 7, 000 have been serviced.

“Financing shortfall is likely to impede the move. The Rwf15 billion have been allocated to serve 244 sectors is the same money to be apportioned in the 416 sectors, it will not do much considering the huge appetite for these loans” said Prof Shyaka.

The government is also yet to make outstanding payments to private suppliers and companies that rendered services.

Charles Haguminshuti, a resident of Cyanika sector in Nyamagabe district, and other 55 people who constructed or supplied construction materials during the construction of the now full furnished Rwf788 million Nyamagabe district headquarters, have not been paid Rwf30 million.

“I supplied to the construction site the stones that constructed the foundation of the district building, but five years down the road, we haven’t got the payment,” said Charles Haguminshuti, a resident of Cyanika sector in Nyamagabe district.

Uwamahoro Bonaventure, the mayor of Nyamagabe district, explained that the overdue payment can be traced to the dismissal of the initial contractor that happened before he paid his workers.

Also awaiting payment are 800 former employees of Energy Water Sanitation Authority (EWSA), who were laid off in a restructuring programme by the government. EWSA has since split into two bodies; Rwanda Energy Group (REG) and Water and Sanitation Corporation.

According to the court ruling of 2015, the government was ordered to pay Rwf4.8 billion out to the laid-off employees, but this is yet to be done. Solving the problem of delayed payments for people who rendered services to government and those who supplied products, was one of the resolutions in the recent National dialogue.