Tuesday, July 13, 2010


Book: Making Public Enterprises Work
Author: William T. Muhairwe 419 pp

I begun my business journalism career in the throes of the privatization process. Privatisation of public enterprises was sold as a way to increase productivity while reducing the burden on the treasury.

It was a relatively easy sell given the wasteful, ineffective nature of many of our parastatals.

The more than doubling of the economy over the last 15 years, justifies that earlier leap of faith, with a quantum jump not only in production but in taxation and job creation as well.

The holdouts against privatization talked about selling “the family silver” but wherever you looked what passed as family silver did not seem worth keeping.

Dr William Muhairwe, managing director at National Water & Sewerage Corporation (NWSC), was one of the hold outs.

In 1998 he was appointed the boss of NWSC – a badly run, technically insolvent and a dead weight on the public coffers that finance ministry officials were convinced needed to be flogged at the first opportunity.

In his recently released book “Making Public Enterprises Work - From Despair to Promise: A Turnaround Account” Muhairwe outlines what it took to get NWSC back on its feet again and acknowledges selling NWSC was the last thing on his mind – especially since he had just been hired as its boss.

The book starts with his promise to turnaround the company in 100 days – a promise that had those who knew the workings of the corporation rolling in the aisles with laughter. Twelve years down the road Muhairwe’s detractors are conspicuously silent.

The book though written as a narration of the turnaround process is less about Muhairwe as it is about the processes that were initiated and the teams that chaperoned these processes.

During the journey the corporation explores novel management styles, gets more intertwined with the fortunes of its clients, negotiates with government and donors for its right to exist and devolved its services away from the center to improve service delivery.

An unintended consequence of this well documented process is that the corporation now has an external services division that offers consultancy services to other water utilities in the region and as far afield as Bombay.

The corporation is still a work in progress and the delivery of water and sewerage services are far from perfect, but as a handbook for how to revitalize public enterprises in the third world this book is the first of its kind.

One of the strongest arguments for privatization is that it brings companies under the discipline of the market and unlocks the value of its constituent parts – capital, labour and assets better than the public corporation.

But the turn around of the NWSC serves as a disturbing exception to the adopted wisdom that privatization is the panacea of the failing public enterprise.

If there is one thing in the NWSC story that one can single out as a dominant factor to its success, is the role of leadership and the agenda it champions.

Before the entrance of Muhairwe to the corporation millions of dollars had been sunk into the company, it was far from understaffed, clearly the missing element was leadership to steer it towards a more customer sensitive and commercially viable entity.

In hindsight it is common sense, but there can be no better rallying cry than the motto the corporation adopted - “The customer is the reason we exist”, an acknowledgment few enterprises public or private can be held to.

Apart from an introductory note about the author, Muhairwe is mostly present as the narrator of the story, which may be counted as the book’s major omission.

Muhairwe’s management style is there for all who read the book, but more biographical detail may have been useful in determining how he came to adopt his managerial persona.

The book is divided in to five parts with 19 chapters and will find a select audience in managers, policy makers and students of business.

One hopes that this is the first of many books on doing business in Uganda during a time of economic transition that will offer a record for future managers, so they can learn from history and not try to reinvent the wheel.

In a largely liberalized economy NWSC is an aberration and managers from both the public and private sectors will do well to pick up a copy for the invaluable lessons the book contains.

Published April 2010, New Vision

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