|
 |
|
|
|
In the Press |
How UCB missed Muhairwe’s magic wand
(The New Vision, Monday, 31 May, 2010)
Written by Pius Muteekani Katunzi
The 1990s were very interesting times. As we were still recovering from the hangover of a transition from a military government to a ‘revolutionary’ guerilla-led one, life was compounded by retrenchment (massive layoffs). And then a privatisation bug hit us.
This bug had no antidote except itself. And ‘revolutionaries’ are not known to brook any resistance. Any appeal to certain sensibilities known to be inconsistent with the revolutionary creed can be interpreted as sabotage. President Museveni, perhaps counting on goodwill and charm then, became the loudest evangelist of privatisation.
Once in 1997, at the time when Uganda and Kenyan relationship was thawing, he told businessmen at the Nairobi Stock Exchange, that for him he had decided to sell all state owned enterprises because he had discovered that government was a bad business person. He reasoned that many of these enterprises were surviving on bailouts from government and this was weighing down on the national purse.
The sale of state owned enterprises was launched at the time when our economy was at low ebb. We didn’t have experts in this field, but we relied on the IMF and World Bank connoisseurs who made our revolutionaries believe that privatisation was sacrosanct. At that time it appeared as though it was etched in stone and there was no alternative policy to help revive the ailing public enterprises.
By the way, many of them were brought to a grinding halt because of voucher (chits) politics and war. Reading the National Water and Sewerage Corporation (NWSC) Managing Director’s book: Making Public Enterprises Work; from despair to promise: a turnaround account - a must read for all those who have planned and intend to plan for our country - I couldn’t help but ask why we succumbed to this bug.
And it is not that there was no resistance from the people; no, the experts reigned supreme. Even when the experts discovered that their diagnosis had been bungled, they could not abort the momentum and say ‘we are sorry because we were wrong.’ It has taken Muhairwe almost two decades to summon courage and own up and prove the World Bank experts wrong. And he is an authority on this.
For he was in Uganda Investment Authority (UIA), a government agency that enticed foreign investors to takeover some of the state owned enterprises, among other investment opportunities in the country and then he has managed to turn around an enterprise that was hanging on resuscitation devices. NWSC just survived the auctioneer’s hammer by a hair’s breadth. What is even more painful is that many of these enterprises were sold for a song.
Others were sold to political cronies, thus committing them to deeper graves. Many of these buyers failed to complete the payments and eventually ran down the enterprises. Essentially, Muhairwe is saying that many state owned enterprises had a potential to run efficiently if they were given a chance, but this was never done.
Muhairwe’s story reminds me of the Uganda Commercial Bank (UCB) and Uganda Airlines Corporation’s (UAC) tragic trajectories and the cannibalization of other enterprises like Uganda Electricity Board (UEB). Government demonized UCB. It had been portrayed as a money gobbling enterprise and the Ministry of Finance got fed up of recapitalising it.
When people asked what the matter was with the bank, it all pointed at poor management, not to its potential to thrive if it were given the right brains. Many of the people who had borrowed its money were well connected and the authorities were shy to ask back this money. So, in government’s wisdom, the remedy lay in privatising it.
Whenever I get stuck at Nairobi Airport because of the abrupt changes of schedule by Kenya Airways, I painfully recall the chance UAC missed when a joint venture with South African Airways (SAA) was frustrated by some politicians and wheeler-dealers, and consequently buried. With benefit of hindsight, we should not have let the donors force privatisation, especially of key sectors, down our throats. If we had many Muhairwe-like minds, perhaps even Uganda Airlines would still be fluttering its wings across the globe.
|
|
|
|
| |
| |
Copyright © 2008, National Water & Sewerage Corporation | Plot 39, Jinja Road, P.O. Box 7053 Kampala, Uganda
Tel: (+) 256 414 315100 / 0312 260 414/5, Fax: (+) 256 414 258 299 / 345 531, E-mail: info@nwsc.co.ug |
|
|
