Country's dream of job creation fades away as agency lies in rot

Wednesday May 27 2020


Inefficiencies have been reported in the implementation of the national employment programme where audit points to low output in various skill development that cost Rwf499,6 million in total. PHOTO | CYRIL NDEGEYA 

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Auditor General has revealed rot that is taking toll on the National Employmment Development Fund which was expected to help the country create jobs.

The auditor in the report said the country's plan of creating 214,000 jobs annually by 2024 is threatened by inefficiencies, deviation from mandate and poor management of funds.

The National Employment Programme (NEP) and Business Development Fund (BDF) – institutions at the heart of this ambition – are said to be suffering from inefficiencies.

A 2019 audit report says the inefficiencies undermine the ongoing efforts to create jobs and eradicate poverty.

According to the findings, BDF, which was set up to facilitate access to finance small and medium enterprises (SMEs), invested a huge chunk of its funds into big companies, and foreign investments at the expense of real beneficiaries who are the youth, women as well as the local startups without collaterals to access loans from financial institutions.

NEP, which was set up to optimise the impact of employment interventions through mainly closing existing skills gaps, is on the spot for low output and inefficiencies in various projects that cost billions of francs last year.


“Our opinion is that if nothing changes, the employment creation targets as stipulated under national strategy for transformation will not be achieved.

That one we doubt, especially when it comes to investment in agriculture as well as supporting the youth and women,” said auditor general Obadia Biraro while presenting the report to parliament.

With unemployment levels in the country rising, the government has been supporting entrepreneurship and removing access to finance limitations by youth and women projects, coupled with TVET Skills training as key to creating the much-needed jobs by 2024.

Bias for large projects

However, the audit shows that since its establishment in 2011, BDF invested more than a half of its credit guarantee allocations towards supporting 217 projects owned by large enterprises.

The projects absorbed Rwf25.1 billion, representing 51 per cent of its total credit guarantees package of Rwf49.2 billion as at August 2019.

The fund also undertook five guarantees worth Rwf261.1 million to three foreign-owned companies.

The audit showed that one of them guaranteed at Rwf108.3 million defaulted, exposing the fund to loss of funds meant to facilitate access to finance nationals.

The fund also incurred losses from compensating ineligible claims to a tune of Rwf256.4 million, provision of credit guarantees to restructured defaulting loans estimated at Rwf2.4 billion, as well as compensating for deviated projects.