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Dozens Of Transport Companies In Financial Distress After Gov’t Fails To Pay Over Rwf2B In Subsidies

6 Min Read

Taarifa Investigative Desk has exclusively learnt that over 24 public transport companies are in a financial distress due to delayed payments accrued from the Economic Recovery Fund (ERF) fund subsidies.
Government is supposed to pay them about Rwf3 billion covering the month of February, March, April and May, 2022.

This has been the state of affairs since last year. The association of Public Transporters (ATPR) has had to take drastic decisions to receive their fund.

On February 8, 2022, the association of Public Transporters (ATPR) wrote to President Paul Kagame, in a letter whose copy is under our custody, requesting him to intervene and instruct his government to respect its commitment to offer subsidies to transport companies due to the effect of Covid-19, under the economic recovery fund.

The ERF was established by the government of Rwanda to support the recovery of businesses hardest hit by COVID19 so that they can survive, resume operations and safeguard employment, thereby cushioning the economic effects of the pandemic.

National Bank of Rwanda was appointed as the Fund Manager.

The government had committed to support the transport sector by subsidizing the cost of transport charged to passengers by paying Rwf4.9 per kilometer.

By the time of writing to the President, government owed ATPR billions of Francs for the months of October, November and December 2021.

In a few hours, their accounts were credited. Problem fixed. However, they have never received no more funds from then.

These companies have been submitting their invoices to RURA for payment of the transport subsidies, now amounting to Rwf2.3 billion for the months of February, March and April, 2022.

All the 24 companies operating across Rwanda with more than 1,028 buses and coasters, employing 4,170 staff are desperate and wondering if they should write to the President again.

“We trust this government’s commitment and support to the private sector,” says Eric Ruhamiriza, the Secretary General of the association, adding that, “the delays in payment affect tremendously public transport business, and results in poor quality service delivery.” Bus companies are now defaulting on their suppliers and their staff are losing their job.

He told Taarifa that some companies have shut down operations because they cannot afford to put buses on the roads anymore.

Meanwhile, Taarifa confirmed with the Central Bank of Rwanda that the funds were transferred to RURA’s account, but RURA’s Acting Director General, Deo Muvunyi said they only received funds for the month of February, 2022.
He however confirmed that the funds meant for subsidies were part of their budget, which was also approved. The only problem, would arise from those responsible for disbursing RURA’s budgeted funds, which is the Ministry of Finance.

A source from the Ministry of Finance said that the Treasury is the one that disburses the funds. The source added that the Treasury disburses the funds on a quarterly basis, contradicting what the bus companies claimed, that they were supposed to be receiving the funds every following month upon submission of their invoices.

The sourced did not explain why government would make such commitment and default the companies yet the funds are available in its coffers. All Taarifa’s calls were ignored thereafter.

Asked why the funds for February have not been disbursed to individual companies, yet they received it, RURA Director General blamed the BNR payment system. “We only received the funds for February by end of May 2022, and we had issues with the system to transfer funds from our account to their accounts, he said.”

Taarifa is, however, aware that his claim is unfounded. BNR system is in good shape.

Transporters who anonymously spoke to Taarifa said that the matter has caused critical financial burdens to uncomfortable degrees. About 400 buses are now grounded and more buses are likely to be take on off the streets because of lack of funds to pay fuel suppliers, paints and full services. Dozens of employees have also been laid off.

They are calling upon government to quickly disburse the funds to save the situation before it is out of hands. “Unfortunately there seems to be no quick fixes or promises, unless we write a letter to the President again,” Ruhamiriza said. “We already engaged RURA enough times, and to be honest, they are too disrespectful. It is not a good state of affairs because it is a sabotage of the government’s policy to revive the economy.”