Rwandan lawmakers have endorsed plans to give more powers to the president to create and disband public institutions and state-owned companies as the country seeks to improve efficiency and minimise waste.
While currently, parliament determines establishment and dissolution of public institutions, Article 4 of a draft law, establishing provisions governing public institutions, says establishment and dissolution of a public institution will be determined by a presidential order. “A presidential order determines the prerequisites for the establishment of a state-owned company and additional rules of its management,” Article 4 reads in part.
The draft law was recently passed by parliament — with 78 MPs voting for it and two against — and also by the Senate. It now awaits endorsement by Cabinet then a presidential signature before being gazetted.
The 2019 Auditor-General’s report said the ineffective management of parastatals stems from parliamentary shackles that prevent them from the flexibility accorded private business ventures, and ceding powers to the president is expected to solve this. It added that up to 31 per cent of public institutions do not have clean audits, while 15 per cent had adverse opinion compared with 19 per cent in 2018. The Auditor-General noted that some institutions — particularly public utilities including Rwanda Energy Group (REG) and the Water and Sanitation Authority (Wasac) — have habitually mismanaged state resources.
“Government institutions like Wasac that are supported to provide a service are still operating at a loss. What is preventing them from operating like a profit-making company?” Obadiah Biraro, the Auditor-General asked.
Proponents of the Bill argue that the implementation of government policies will be freed from rigorous red-tape and bureaucratic processes in parliament, and hence ensure the acceleration in the implementation of government programmes and policies.