Eastern Province: PSF faces Rwf20 billion financing shortfall

Eastern Province Governor, Fred Mufulukye speaks at tourism workshop in February. (File)

Last year the Private Sector Federation (PSF) in the Eastern Province pledged to implement investment projects in the seven districts that make up the province.

The commitments are contained in the performance contract that the federation signed with the government.

However, recently the umbrella arm of the business community realised that its members were reluctant to partake in the projects, compelling the federation to intensify efforts to mobilise the resources.

PSF had identified various investments projects to implement in each district ranging between Rwf1 billion and Rwf3 billion.

The total investment outlay for all the districts in the eastern province was estimated at above Rwf20 billion, but the inability to raise the required money has delayed the implementation of the projects. 

In the districts of Bugesera, Kayonza and Ngoma the private sector pledged to invest in commercial building.  

Claudian Mushabe, Mayor of Nyagatare District, speaking at the provincial Private Sector Federation meeting on Friday 

In Kirehe they pledged to invest in a hotel, Rwamagana a modern market, Gatsibo a modern taxi-park and Nyagatare a maize processing plant.

However, Augustin Mutabazi, the Chairman of PSF in Kirehe District, said they are short of Rwf1.2 billion needed to construct a hotel.

“We realised that our district was lacking a hotel, which made it impossible to host provincial or any other top level meetings,” he said.

Eastern Province Private Sector Federation (PSF) meeting was attended by Governor, district mayors and PSF representatives at district level 

Thus, private sector operators who are grouped under PSF in the district founded Migongo Investment Group, as the owner of the project.

With 4,000 shares available in the company, each share was costing Rwf300,000.

Even as 2,800 shares were booked, potentially translating into Rwf840 million, Mutabazi said that the company has only Rwf15 million in the bank.

Mutabazi argued that the shortfall is because the private sector does not fully understand the power of working together, especially given that in the recent past some of them who were grouped in cooperatives made losses.

However, in Bugesera PSF members are close to raising the investment capital of Rwf1 billion they need to construct a commercial building.

Eugene Higiro, the Chairperson of PSF in the district, the shareholders have already paid for a third of the shares and are on course to acquire the remaining shares.

In order to expedite the implementation of their project, they have applied for a bank loan, he disclosed.

“We have no excuse for not having a complete building within two or three months ahead,” Higiro stated.

Jean Bosco Ndungutse, the Chairperson of PSF in the Eastern Province, encouraged members to embrace the idea of joint ventures.

“The more we work together, the further we go,” he said.

Robert Bapfakulera, the Chairman of PSF at national level said that the federation’s idea is to create management teams at district level to oversee the execution of the projects and mobilise resources.”

For Bapfakulera, the slow participation of the federation’s members in certain projects does not necessarily reflect the lack of partnership spirit.

“Businesspersons, as you know, target profits in what they invest in, and they do it when they understand how they will benefit,” he explained.

The PSF leaders will have to redo the business plans of the projects in order to attract investors, he said.

The governor of the Eastern Province Governor, Fred Mufulukye, said; “These projects did not run as fast as we wanted.”

But still, he added, although we have not moved as fast, we have not quit, we should celebrate that too.

 

ADVERTISEMENT