Sunday February 9 2014

Govt should be a good consumer

Secretary to the Treasury Keith Muhakanizi’s directive to government departments and ministries to pay up the Shs36 billion they owe National Water and Sewerage Corporation within two months is welcome and hopefully he sees it carried through.

Ugandans will recall that government indebtedness is the reason many State enterprises collapsed, not because they were incapable of running the businesses but because government, which was one of the biggest consumers of their services, was also the biggest defaulter and they could do nothing to force it to pay up.

Besides the government, well-connected bureaucrats and politicians also often consumed services and never paid up. For example, at the time of the privatisation of Uganda Commercial Bank, reports indicated that military officers in the national army collectively owed the bank at least Shs281 million. Up to $4 million had also been given out in unsecured loans to businesses connected to powerful politicians in government. The situation was much the same with the defunct Cooperative Bank.

The case of Uganda Airlines was just as bad with the government owing the national carrier billions of shillings in unpaid air tickets. In the end, nearly all the state enterprises were sold for a pittance ostensibly because government was not good at doing business yet the reality was that government was not good at paying its debts!

As the English say, “a stitch in time saves nine”! Mr Muhakanizi’s directive to government departments to pay up, therefore, does not only ensure that NWSC is able to operate and deliver good services to other customers who pay up on time for the water they have consumed, it also will ensure that the corporation does not go the way of the others which has left some of the country’s critical utilities in the hands of profit-oriented private investors. The result is that Ugandans pay some of the highest costs in electricity, transport, et cetera and this has an effect on the overall standard of living.