By Paul Busharizi

MAKERERE University has been closed indefinitely following a breakdown in talks between the campus staff and the Government over pay increases.

The staff is pushing for a minimum monthly wage for assistant lecturers of sh8m.

I will be the last to begrudge anyone their wage demands. After all, you get paid according to what you negotiate, but I think the dons of the ivory tower are going about things the wrong way.

According to sources familiar with the situation, the teaching staff want the Government to pay their salaries because they know they have reached the limit of how much they can reasonably extract from students in fees, and secondly, because they fear that in an increasingly competitive sector, they will earn less. They need to secure their salaries by insisting on a vote from the treasury.

I have heard it said that Makerere was once referred to as the Harvard of Africa (must have been long before my time), so I shall refer to how the original Harvard handles its finances as a pointer to how Makerere should be thinking.

First of all, the desire to be paid by the Government is a losing strategy on two fronts.

To begin with, the incentive for Makerere staff to be more productive in terms of teaching students will be removed. As it is now, teaching staff’s pay is also pegged to the size of the class one teaches. This incentive system has glaring weaknesses but at least it ensures that lecturers make an appearance in the lecture theatres.

It does not take rocket science to work out what will happen when lecturers start drawing salaries from the consolidated fund. And related to that, improvements in staff productivity will not be recognised as readily at the finance ministry as it may if spending decisions are controlled by Makerere administration.

A man after dreaming about acres of diamonds sold his land and set out into the world in search of his fortune. He went prospecting all over the world, failing miserably sometimes or striking it rich only to squander all his wealth.

Frustrated and dejected, he returned to his village where he expected he could throw himself at the mercy of friends and family. On arrival at his old home, he found it was a flourishing diamond mining enterprise fuelled by diamonds from his old plot.

Everybody, except the dons themselves, realise how much gold they are seating on.

It is a stretch to compare Makerere with Harvard, but for illustrative purposes, America’s oldest university has some interesting pointers.

In 2008 before the credit crunch, Harvard had an operating budget of $3b a year. However, the university managed an income of $9.3b, of which only $600m or just over 5% came from student fees. And we know Harvard’s student fees are not to be laughed at.

So where does Harvard get more than 90% of its income? About half of the budget is met by income from its $35b endowment fund – this was the value before the credit crunch.

The other comes from donations, merchandising, publishing and licensing of patents the university holds. This is aside from the fees from hiring out their buildings and land or consulting. They also earn about $1m a year from ticket sales when university teams are playing.

Yale is not very different, with student fees accounting for just under 10%. The bulk of income comes from their endowment and medical services.

These vaunted institutions of learning do not create new revenue streams because they like to, but because they have long came to realise that there is only so much they can charge students to enroll.

Makerere University’s intellectual properties (if it has bothered to license them at all) are worth millions of dollars, if only their value can be unlocked for the benefit of the institution.

What Makerere needs is time-tested entrepreneurial managers, who can unlock the billions of shillings of assets that the university owns and controls.

But maybe we should not be too harsh on Makerere when the same syndrom is coursing through the general society. When we have a need, our first instinct is to look outside ourselves for help yet we have all we need around us – as individuals, institutions and even as a country.

Makerere does not need handouts from the Government. In fact, it is in the university’s best interest not to go begging to the Government.

pbusharizi@newvision.co.ug