When history is written one of the best things the NRM did
to this country was to privatise the state owned enterprises and break up their
monopolies in everything from telecommunications to produce marketing to power
generation.
At the time these things were happening in the 1990s the
hecklers said we the economy was being handed over to the foreigners, they
would gut it, bury it and hand us back the scraps.
If these people had their way we should never have
privatised these companies, just injected more capital in them (from where your
guess is as good as mine), if not hand it over to local businessmen and keep
the companies in local hands.
In life there are things that look good but don’t work and
things that don’t look good but work. Which side of the table would you like to
be.
We forget that for the first four years the NRM listened to
these “nationalistic” voices – some of them are still shamelessly among us, and
in order to support this baggage of non-performing companies, government was
haemorrhaging the little money it had – we were collecting less than five
percent of a very small GDP, in revenues. And if that failed the government printed
money to support these carcasses which sent inflation shooting through the
roof.
"In the budgets of those years the finance minister, embarrassed to report the annual inflation figures, would talk about inflation in months. So you would hear that inflation had dropped to 25 percent per month, which was actually about 300 percent a year. Now when inflation reaches 30 percent a year like it did in October 2011 we “walk to work”...
Inflation comes when there is too much money chasing too few
goods. So government was printing money to pay salaries for companies that were
not producing.
The problem was not that these companies did not have money,
they lacked management –an executive floor full of MBAs is not necessarily good
management and the context or environment in which to manage well.
Culling these shells from the government budget did a number
of things but more importantly, it saved the government billions of shillings –
in the case of Uganda Airlines Sh10b monthly or about $10m at the time, that
they could deploy to other more pressing needs and secondly, and just as
important, in released the new owners and management of these institutions from
the stifling, often corrosive burden of government oversight.
I shudder to think what the situation would be today if
government still had a strangle hold over the electricity, telecommunication
and produce marketing sectors. It would be a disaster.
However there were exceptions to the rule.
Last week the Global Credit Ratings company, a leading
emerging markets credit rating agency, judged National Water & Sewerage
Corporation (NWSC) a good credit risk, essentially that money lent to them has
a better than good chance of being repaid.
You cannot wish such things into existence. These rating
agencies check not only your financials, but the systems and structures that
deliver these results as well as the market one operates in.
This is a culmination of work that started with Dr William
Muhairwe’s promise, nearly 20 years ago
to turn the company, which was on its last legs, around in a 100 days. Truth be
told Muhairwe, as with other managers of the time, was charged with preparing
the company for privatisation. His mission got lost in translation and he did
not play to the script.
The import of that credit rating is that NWSC has access to
unlimited funds in a way that few other companies in Uganda – public or
private, do.
It is an outlier.
"For national pride or whatever you want to call it, it would do us good to identify credible management teams that deliver on their mandate and let them run with the ball...
Which brings me around to the rationalisation of government
departments and particularly the reabsorption of Uganda National Roads
Authority (UNRA) into the works ministry.
Despite struggling to restructure the authority over the
last three or so years, the management has managed to deliver projects, in time
and cheaper than previously, and is on the verge of achieving take off. It has
not reached the level of NWSC but has revived lender confidence in its capacity
to absorb funds and deliver on projects.
If things go as planned the momentum they have built will be
invariably lost with a return to a ministry they were hived off from for
exactly the reasons it should not go back.
UNRA is not any agency. It is charged with widening and
maintaining our national road network. In the absence of credible railway
network, it is imperative that our road network be in tip top shape. The need
is there, we have a road network five times as small as neighbour Kenya’s per
unit of land area, what we need is access to funds and the capacity to build
these roads.
It has gone silent on this restructuring talk, which in my
experience is never a good thing and means they are going ahead with it anyway.
I would like to be wrong on that.
