May 19, 2020

POSITIVO Laptops Worth Rwf 1.3bn Paid for by Government Lay Idle in Warehouses

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POSITIVO BGH is one of those private firms that have benefitted immensely from government willingness to support Made in Rwanda products

Two government agencies are stuck with 7,246 defective laptops which were supposed to have been distributed more than two years ago.

In addition, as part of the same project, the Auditor General Obadia Biraro warns in report to Parliament that government risks losing over Rwf 4.7 billion in taxpayers money.

The details of the computer distribution project are complicated, to say the least. On October 9, 2015, Africa Smart Distribution (ASID) a private firm, signed with the Government of Rwanda (GoR) a five-year distribution agreement to be the exclusive distributor and the wholesaler for POSITIVO laptops assembled by Positivo BGH.

In January 2018, Government loaned the same company ASID with Rwf 3,651,845,836 which it was to use to buy 19,483 laptops.

In other words, the Government pays for laptops assembled by Positivo BGH and then handed over to ASID for distribution. These laptops go to students, teachers and different other groups, many of who pay for them in instalments.

All the more than 19,000 laptops were to have been distributed out by May 2018. That is did not happen.

Instead, the Rwanda Information Society Authority (RISA) and Rwanda Education Board (REB), which were working with ASID on the project, found that 7,246 laptops were defective. They were not fit for distribution and were returned to the producer.

The maker of the laptops, POSITIVO BGH agreed to repair the laptops within a few days or week, so that they would be distributed. However, the Auditor General says by January 2020, the latops were still in POSITIVO warehouses.

“Therefore, considering the time these defective laptops were returned, POSITIVO GBH delayed to repair them for a period of 384 days,” reads the AG’s extensive report.

Now, it is from here that the AG raises concern over the imminent loss of Rwf 4.7billion of the money that the Government through the Ministry of Finance loaned to ASID.

The firm, in the loan agreement with Government, committed to repay the loan of over Rwf 3.6bn plus some interest between March 30, 2018 and June 30, 2020.

For every quarter, ASID was to transfer Rwf 352,135,731.40 to the Government coffers as loan repayment. The money to repay was expected to come from the onward sales of the laptops.

However, it seems, nothing went according to plan for the firm ASID. According to the Auditor General, from March 30, 2018 to June 30, 2019, ASID should have paid 6 quarterly payments totalling Frw 2,112,814,388.40 to the government. (SEE TABLE BELOW)

But up to the time of audit in June 2019, ASID had failed to make any full quarterly repayment as instructed in its agreement with government. Only Rwf 167,000,000 was repaid, representing 8%, to the government.

Why is ASID unable to pay the government loan yet it has to have competed repayment by end of next month? The Auditor General interfaced with all sides involved: RISA, REB and the company.

On the part of RISA, the AG says the management team “did not avail evidence of follow up made with ASID to speed up the loan recovery process”.

As for ASID, the AG says the firm is unable to repay the government loan because it is facing “financial hardship”, adding that, “This hardship resulted from difficulty of making sales of laptops and the clients who do not timely settle their dues to enable ASID to repay the loan.”

In short, the students and others buying ASID computers through instalments are not paying well, leaving the firm unable to generate income to repay the government loan.

And so what will happen to the taxpayers money given to ASID? The Auditor General says the “low rate of repayment casts doubt on ASID’s ability of repaying outstanding loan”.

“This is further an indicator that ASID may not fully repay government loan in agreed period” of June 30, 2020, according to the AG.

Review of available documentation by AG revealed that the government is at risk of losing funds amounting to Rwf 4.7 bn (the original loan and interest).

The laptops, as bought from POSITIVO BGH, are of two types and cost as follows:

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