Rwanda’s Loan Conditions Derail Rwf82 Billion 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.

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.

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 that the nature of the project itself makes it very difficult to implement.

He said it is a major issue that the project 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.

The officials have now said that the project was being revised as an attempt to put to use these funds.

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 of goods and services on the market, 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.

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.