Rwanda loses millions of francs annually on rent for State institutions even as many public buildings remain unused.

The concern was raised by parliament’s Budget Committee, which termed this a big loss to the taxpayer. MPs lamented that the government invests a lot of money in building houses that end up being unused while it spends money on renting offices from private investors.

The committee revealed that at least Rwf139 million is spent every year on rent for government institutions alone.

Constance Mukayuhi Rwaka, the chairperson of the committee, said the government should not invest in non-profit-making projects, adding that it should look for a solution to this problem.

“The government should do everything possible to curb this loss by looking for other, better ways to settle this issue,” said Ms Mukayuhi. “There are many government houses that are not being used yet the government spent a lot of money to construct them.

“This money should be relocated in other government activities.”

The Rwanda Social Security Board (RSSB) was accused of playing a big role in the heavy loss. The recent Auditor-General’s Report revealed that many government houses built by the RSSB across the country are lying idle.

The report further said the country lost Rwf65 million in unproductive construction projects as a result of poor planning since many houses were built with no targeted interest.

“There is a concern over affordability of housing units which were built by RSSB in Nyagatare District in a project intended for low- and medium-income earners,” the report said.

“According to the feasibility study of the project, 150 houses was planned to be constructed on 29 hectares at a cost of between Rwf10 million and Rwf15 million each based on affordability by the target buyers,” report added.

However, the report revealed that, based on the two model houses constructed for demonstration purposes, the cost of building these houses would increase to about Rwf30 million each, which is significantly higher than the envisaged cost that would be affordable for low-income earners.

It is therefore clear that the targeted buyers may not afford these houses; the project success is therefore doubtful and the expenditure already incurred by RSSB likely to be wasteful, the report added. The board was also accused of not having commitment to pursue its investment activities.

“At Rwanda Social Security Board there was no board of directors’ involvement in either controlling investment activities or taking key investment decisions,” the report said.

The report has shown that 22 equity investments involving significant amounts were acquired by RSSB without the assessment and approval of the board of directors, despite requirements in the Investment Policy Statement for the board to oversee the overall portfolio management and making of investment decisions.

However, only five of the above investments have paid a dividend to date.

Weaknesses in contract management were still persistent across the board in public entities and have resulted into increased cost of government projects, significant delays in completion and lack of value for money from many state projects, the report added.

There are also various failed or abandoned projects which have denied beneficiaries envisaged facilities and services.

The report revealed that the contracts for 78 projects worth Rwf126 billion were delayed and the works were not completed on time. Out of these, 14 projects worth Rwf3.3 billion failed to proceed and were abandoned even after the contractors had been paid Rwf1.8 billion.

The audit further identified various government programmes worth Rwf81.7 billion where there was no proper planning and co-ordination, leading to implementation challenges which are undermining realisation of intended objectives.

Unable to recover loans

It also identified various cases where RSSB had not been able to recover loans granted or proceeds from disposal of investments with potential loss of funds totalling Rwf16 billion — including loss of public funds in loans and construction projects worth Rwf9.6 billion and another loss on the sale of three investment properties of Nyarugenge Pension Plaza, Kicukiro Pension Plaza and the former Caisse Social Rwanda (CSR) headquarters in Kacyiru that was worth 1.4 billion.

The AGs report has also raised concern over low occupancy rate in the four RSSB plazas across the country.

Those include Musanze Plaza, which is occupied at 53 per cent, Rwamagana (22 per cent), Nyanza (15 per cent) and Karongi, occupied at 53 per cent. The low occupancy rate was also noted for Kacyiru Executive Apartments, which stood at 44 per cent at the time of the audit visit to the apartments in March.

However, these occupancy rates made doubt on whether RSSB will get proper and adequate return on these investments.

This week, RSSB officials, including the chairman of the board of directors and his vice-chairman, were summoned by parliament’s Public Accounts Committee (PAC) to explain anomalies found in this board but they did not show up.

Dr Daniel Ufitikirezi, the director-general of RSSB, told the committee that board chairman had health issues and so he could not attend the session while the vice-chairman was in Turkey on duty.

PAC chairman Juvenal Nkusi said it was impossible to have only one person give all the explanations while many decisions were taken by the entire board of directors.