NWSC hits a record high operating sh162b surplus

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The National Water and Sewerage Corporation (NWSC) has posted its strongest financial performance to date, reporting an operating surplus of Sh162b for the Financial Year 2024/25.

This represents a 14% improvement compared to the previous year, according to the draft audited accounts released by the Corporation recently.

Speaking to the New Vision, Dr Eng. Silver Mugisha, the Corporation’s managing director, attributed the milestone to a deliberate focus on revenue improvement, stringent cost containment measures, and a renewed push to curb system inefficiencies such as water losses.

According to Dr Mugisha, the Corporation’s core revenue from water and sewerage services increased by 5%, supported by a modest 2% tax indexation.  NWSC’s total assets increased by 9%, rising from Sh4.6t to Sh5t, driven mainly by a 7% growth in non-current assets.

On the expenditure side, NWSC achieved remarkable efficiency, with total operating costs rising by just 1%. This was largely due to careful management of employee benefit expenses, transport, and mobile plant costs.

“These results show that efficiency and accountability can drive tangible improvements in service delivery. We are deliberate as a Corporation, and we shall continue tightening all loopholes,” Dr Mugisha said.

Meanwhile, the efficiency gains translated into direct benefits for customers across Uganda. In FY 2024/25 alone, NWSC rolled out about 60,000 new house connections and extended its network by 500 kilometres of main pipelines. The Corporation now serves 282 towns nationwide, bringing Uganda closer to its vision of universal water access.

Dr Mugisha emphasised that the Corporation has stepped up efforts to reduce non-revenue water (NRW), a challenge that affects many utilities globally.

The Corporation is currently conducting a comprehensive research study on the impact of overhead tanks and meter separations on water meter accuracy at customer premises.

“We have instituted a study, and the findings will inform a new policy framework on loss adjustment factors, designed to account for inherent meter inaccuracies caused by low flow rates. This will strengthen our ability to reduce water losses and improve billing accuracy,” he added.

He reaffirmed NWSC’s commitment to the vision of “Water for All” under its jurisdiction. This is one of the Corporation’s strategies that seek to steadily grow internal financing capacity to fund both operational and capital needs.

Currently, NWSC covers about 70% of its combined operating and capital expenditure requirements from internal resources, and the goal is to expand this share further.

To support its capital development agenda, NWSC successfully tapped into market financing, leveraging its strong financial statements and operational track record.

Over the past five years, the Corporation has accessed a total of Sh190b from local banks, which is being successfully serviced without default.

“This financing model has given us greater flexibility to engage less expensive contractors, conduct engineering design in-house, and shorten procurement periods by avoiding lengthy approval processes from external financing partners.”

Challenges to be addressed

Despite the impressive results, NWSC’s financial momentum remains constrained by the slow settlement of water bills by Ministries, Departments, and Agencies (MDAs).

The debt age for MDA water bills currently exceeds 15 months, compared to just 2.5 months for non-government customers. This slow payment cycle hampers the corporation's ability to reinvest surpluses in capital projects.

“We commend Government’s intervention of earmarking Sh81b in the FY 2025/26 budget to reduce outstanding arrears from MDAs. This move is expected to ease pressure on the Corporation’s cash flows.

With strong financial footing, enhanced operational efficiency, innovative market financing, and government support to address outstanding receivables, NWSC is positioning itself as a model public utility.

This includes building internal capacity for sustainable growth, where they have rolled out several cost-containment and efficiency-enhancing measures.

These include part-time employment to rationalise staff productivity, in-house development of business process technologies, limiting outsourcing of engineering designs to maximise internal talent, strict regulation of administrative costs, and continuous staff training with close monitoring of individual performance.”