Death of 1,570 Girinka cows, contracts at abnormal price, projects without baseline among issues pointed out by AG

On 17 mai 2022 at 09:38

The new report of the Auditor General (AG) of State Finance for the year 2020/2021 on the management of public institutions, funds management and development projects has indicated gaps in the agriculture sector.

The report shows that these gaps in agriculture-related projects impeded ambitions to create new jobs and uplift citizens from poverty.

It has been observed that some of projects overseen by Rwanda Agriculture and Animal Resources Development Board (RAB) awarded contracts at an abnormal price higher than the prevailing market price which resulted into the wastage of public funds estimated at Rwf1.4 billion.

On 31st January 2020, the report indicates, Rwanda Agriculture and Animal Resources Board signed a framework contract with a contractor for the supply and installation of irrigation infrastructure in different locations in Rwanda. This contract provided for hiring of excavation machine at a cost of Rwf 3,800,000 per day.

According to prevailing market prices, this price is unreasonably high because the standard price ranges between Rwf300, 000 and Rwdf500, 000 in Kigali City or between Rwf600, 000 and Rwf1.6 million outside Kigali.

Similar contract was awarded during the execution of four projects including Gashora and Mukunguli Mashlands, Rwabiharamba dam and Bwera dyke.

During the year ended 30th June 2021, the government earmarked Rwf14 billion under the agricultural input subsidy scheme. This brought the total investment in the scheme since July 2017 to Rwf 53,935,236,289.

The Government through the Crop Intensification Program (CIP) provides agriculture inputs (seeds and mineral fertilizers) to farmers through a subsidy scheme to help them transition from subsistence agriculture to intensified agriculture for farmers to sustain the country’s food security.

However, the report indicated that the scheme is facing challenges in its implementation, which impinge on its intended objective of increasing agricultural production. These include weaknesses noted in the use of smart Nkunganire system, a digitized supply chain management system used in the management of the national farmer’s subsidy program.

A review of the system revealed weaknesses including information on arable land not shown for each farmer in the system and fertilizers sold without using Smart Nkunganire System yet all agro-dealers are required to use Mobile Ordering Processing Application (MOPA) to order and sale seeds and fertilizers to the farmers.

Other issues include the delay to pay suppliers’ invoices for agricultural inputs (fertilizers and seeds).

The audit noted that fifteen (15) districts delayed to pay suppliers’ invoices of seeds and fertilizers amounting to Rwf5.1 billion. The delays were up to 736 days. As a result, this may delay the supply of seeds and fertilizers to farmers.

There is also an issue of agro-inputs sold to neighbouring countries and failure to reconcile seeds distributed to agro-dealers with seeds received by farmers among others.

Weaknesses in the implementation of the irrigation program

The report has shown that some irrigation projects are not sustainable due to failure to correct pointed out defects.

One of key strategic interventions of National Strategy for Transformation (NST1) is to increase the acreage of consolidated and irrigated land from 48,508 ha (2017) to 102,284 ha in 2024 and to promote agricultural mechanization.

In responding to this national aspiration, RAB has invested heavily in mechanization and construction of irrigation projects in various marshlands across the country.

During this year’s audit, it was noted that there are rampant defects in constructed irrigation projects reported in previous audit that had not been addressed to enable efficient functioning of the irrigation schemes.

The report indicated that the government is not realizing value for money from funds invested in their construction as the beneficiaries are not using them for the intended purpose.

Problems in milk collection centres

The government has invested Rwf12.9 billion in Milk Collection Centres (MCCs) project with an aim of building milk collection centres to collect raw milk, where processors can get a greater volume and quality milk. However, the audit of this project revealed that many milk collection centres operate below their installed production capacity.

It was observed that 90 out of the 132 MCCs constructed (68%) are operating below 50% of the installed capacity, 17 MCCs (13%) were operating between 50-75%.
The milk collection centres were operating below their installed production capacity mainly due to low supply of milk from farmers.

Among others, three MCCs namely Busoro in Nyanza district, Bumbogo in Gasabo district and Nyamiyaga in Kayonza district that were constructed at a cost of Rwf 216,504,403 were not operating at the time of the audit. Further, twenty-nine (29) milk coolers and thirteen (13) generators worth Rwf 201,539,323 and Rwf133,195,010 respectively were idle.

Post-Harvest and Agri-Business Support Project

The Government invested funds amounting to Rwf 37,238,834,673 in the implementation of Post-Harvest and Agri-Business Support Project (PASP) with the objective of addressing challenges of post-harvest losses in priority crops to increase rural incomes and create new investment and employment opportunities for vulnerable groups.

PASP started in March 2014 without needs assessment and baseline data on the level of post-harvest losses and capacity of existing post-harvest handling infrastructure per commodity value chain in each district. The project was implemented without information about the capacity gaps in terms of facilities to be closed by the implementation of the project.

The investment committee approved beneficiary’s business plans without assessing whether the plans were viable and ready to be implemented. In aggregate, forty-four (44) approved projects involving investments of Rwf 3,365,149,212 including grant amounting to Rwf 899,709,733 have failed and were abandoned by business promoters before starting operations.

Regarding idle buildings and machines procured with PASP grant funds, the audit identified one (1) fruits and vegetables collection centre, five (5) processing plants and maize milling machines worth Rwf 907,073,852, that were idle for a period of up to four (4) years.

The fruits and vegetables collection centre lacked cold rooms, a key equipment in storage of fresh vegetables and fruits. On the other hand, the processing plants and maize milling machines lacked three-phased electricity connections which contributed to the assets being idle as these were not included in the project design as indicated by business plans approved by Business Development Fund.

Among others, thirteen (13) projects that cost Rwf 3,323,078,903 which received PASP grants amounting to Rwf 1,302,929,347 were completed and not put to use due to incompatibility of machines and solar systems, and equipment not being in conformity with technical specifications. As a result, government is not realizing value for money.

The report established that BDF held undisbursed funds amounting to Rwf765,918,178 and it was also expected to recover funds amounting to Rwf 790,249,471 from beneficiaries whose grant contracts were cancelled as a result of unsuccessfully implementation of funded projects. However, there is no provision on how the remaining funds will be used after the project’s closure.

Glitches in Gako Beef Project

Gako Beef Project started in October 2014 with the aim to establish a sustainable cattle production system for development of quality meat, and marketing value chain in Rwanda. The Government invested Rwf 14.6 billion in constructing infrastructure including roads, water and electricity.

The audit of this project has however pointed out gaps including the lack of project design and clear strategic direction.

The report shows that RAB did not have a project profile documents detailing specific objectives of Gako Beef Project, key performance indicators, roles and responsibilities of involved stakeholders, project technical design, required resources and market strategies.

Else, it is reported that RAB did not have a clear multi –year action plan detailing what and how activities and the targets were to be implemented from 2014 up to 2020 when Gako Meat Company was registered to replace Gako beef project.

This hindered the implementation, coordination and monitoring of the project.

Agreement between Government and investors stated that investors should have a business plan indicating the established breeds of cattle, the allocated land to grow pastures, the minimum number of cattle to deliver to the abattoir, the minimum beef production and the type of feedlot that will be constructed.

However, the audit did not get the business plans from investors for analysis. As a result, investors were rearing types of breeds that were not included as agreed, and they did not establish the minimum number of cattle to deliver to the abattoir. Consequently, the report reveals, type breeds unfit for meat production are being sold by Gako Meat Company.

Gaps in Girinka Program

Girinka program was initiated to reduce poverty through dairy cattle farming, improve livelihoods through increased milk consumption and income generation, improve agricultural productivity through the use of manure as fertilizer, improve soil quality and reduce erosion through the planting of grasses and tree.

From January 2016 to June 2021, the Government invested Rwf18 billion in this program. However, the audit of this program indicated that contradicting criteria between Ubudehe categorization and Girinka Program resulted in providing cows to beneficiaries incapable of managing them.

According to the program design, the eligible beneficiaries to benefit from Girinka Program should be in category 1 or 2 of Ubudehe, have well-constructed cowshed and at least 0.25 to 0.75 hectares of land for plantation and grazing. Category 1 is described as extremely poor family and category 2 as poor family. In addition, category 1 beneficiaries are those that neither own a house nor land.

This led districts to provide cows to beneficiaries who are incapable of keeping them to yield the intended quantities of milk. As a result, 23 beneficiaries returned cows to Districts’ authorities (Burera and Bugesera). Besides, the report noted instances where cowsheds were not adequate to keep cows in good condition. Consequently, the Districts registered death of 1,570 cows in three (3) years due to poor maintenance.

At the start of the program in 2016, MINAGRI identified 1,037,111 poor families to be considered for the program with equivalent number of cows needed to accomplish the program objectives. A baseline survey was not conducted to establish the number and localities of eligible beneficiaries who need cows as required in the concept note.

The audit has established that RAB continues to inject funds into the program without updated information on the needs in each district. Up to the time of audit in October 2021, RAB had not established key performance indicators to measure the extent to which the program has met the target objectives, key achievements and areas that need improvement.

The AG has also indicated gaps in Girinka Program.