Makerere should create commercial ventures and strategic investments

By Hon Professor Semakula Kiwanuka

It is graduation week for Makerere University starting today, Tuesday, February 21, 2017.

So, as the celebrations start today till end of the week, I would like to propose some funding options to help Makerere get out the persistent budget shortfalls.

Funding higher education including universities is a financial challenge for most governments. Hence some of the recommendations to the Visitation Committee included the following;

Andrew Ssenyonjo (New Vision, January 22) recommended that Government should stop direct funding and resort to project grants. In his view, that would find a lasting solution to the student strikes.

How project grants would stop the strikes, Ssenyonjo did not say. More importantly, he did not show how project grants would bridge the ever increasing financial gap of the university.

Professor Nkata, the Director of the Uganda Management Institute, had similar views. He recommended that the Government should adopt a grants method whereby universities should compete for such grants. Professor Nkata, like Ssenyonjo, did not say where the grants would come from or how they would bridge the short-falls. In my article in the New Vision of January 25, I emphasised the importance of adequate funding without which Makerere's financial crisis would persist.

Whether we call the funds grants or whatever name, the issue is adequacy to enable the university to carry on its main function of teaching and research. Professor Abdul Kasozi has written extensively on universities.

In earlier discussions on Makerere, he made references to the Universities of Oxford and Harvard without elaborating how these universities are funded. These so-called ancient universities are fabulously wealthy through various investments including real estate and other ventures. They also have generous endowments which, over the years, have accumulated. These different sources generate additional revenue. My recommendation in this article is that;

Makerere should create commercial ventures and strategic investment in order to generate additional revenues. This is possible because Makerere has a number of readymade prime resources from which it can generate revenue to supplement its budget and reduce its sole dependence on government and on tuition fees.

According to the available information, Makerere funds 40% (sh30b) of its budget from students' tuition fees. The remaining 60% is funded by the Government. Although the sh30b (40%) were described as internally generated revenues, they are fees collections from students. The bigger the student numbers, the bigger the internal collections of fees. This explains the ever bulging and unmanageable numbers of students who are regarded as cash cows.

The Government wisely resisted pressure to increase tuition fees because such increases would have priced out students from poor families.

Areas of strategic investments:

On my return from exile, after the NRM government had come to power, I was appointed UNDP Chief Technical Adviser (DCTA) for Planning and Development at Makerere.

Before then, (1985-87), I was a Senior Consultant of the United Nations Environment Programme (UNEP) in Nairobi. I must confess that I was envious of Kenya which had attracted a big UN agency (UNEP) to locate its headquarters in the Kenya capital. But I was confident and hopeful that Uganda would also become as attractive as Kenya, especially in view of the fact that the NRM was getting our politics right. However, in those early days of the NRM, the country still faced many development challenges and constraints to attract international organisations and multinational corporations to locate their regional headquarters in Uganda.

International workers are attracted not only by high class residential and office accommodation, but also education and health facilities of international standards.

These were lacking in those early days. For this reason and in my capacity as UNDP Deputy Chief Technical Adviser for Planning and Development, I proposed to the University that they should seek strategic partners to build world class apartment blocks in Kololo and Makindye but it never happened.

Low and middle income housing

I recommend two areas for investment. These are housing and commercial farming.

In Uganda today, there is an acute shortage of housing for low and middle income. It is a sobering fact that it was the British Colonial Government which saw the need for low-cost housing when they built Nakawa and Naguru estates, which were demolished without replacement.

Consequently, there is still a terrible shortage of low and middle income housing estates. Makerere can fill this shortage by building middle income housing estates on its land in Mulago, Katanga and Makerere hill itself. Kololo and Makindye land should be reserved for upscale apartment blocks. Although real estate development is capital intensive, I am sure the university can attract strategic investments partners such as Shelter Afrique.

Commercial Farming

Another area for investment is commercial farming.

Because of the bulging urban population, investments in large scale food and dairy production cannot go wrong. Makerere should start to use some of its land for commercial food and dairy production.  There are other investment areas.

In Nigeria, for example, universities possess first-class schools. Today, in Uganda, private schools are money spinners. Makerere used to have a primary school on campus, which, however, was very low grade. If that school is still in existence; it should be redeveloped to become part of the commercial revenue generating ventures. For years, I recommended also that The Guest House should be upgraded to a Three or a Four Star Hotel with extensive conference facilities.

Halls of residence

Makerere should continue as a residential university, managing its own properties. I say this because Uganda's property grabbers have for long been on the prowl agitating that the halls should be sold.

While I recommend retention, it is important to emphasise that the residence halls should be professionally, commercially and efficiently managed to generate additional revenue. If universities in the United Kingdom, for example, do possess and manage halls of residence, there is no reason why Makerere University cannot cost-efficiently do the same.

Create endowment funds

In terms of Africa, Makerere is an ancient university with a global reach of friends.

It can, therefore, attract endowment funds into which friends, donors etc can make donations including gifts. Makerere can borrow a leaf from the USA universities which are generously endowed.

These are topped by Harvard with $37.6b, followed by Yale with $25.5b. In United Kingdom, Oxford and Cambridge are also generously endowed. Cambridge boasts of an endowment of £5.8b while Oxford is second with £4.78b (as of 2016).

Establish science, technology and innovation parks

In order to promote research and development as well as innovations to generate revenue, Makerere should use part of its lands to establish science and technology and innovation parks.

These would be ideal places to attract researchers who may not necessarily be university staff. In this regard, Makerere does not have to invent the wheel because many universities in the United Kingdom do have science and technology and innovation parks. Cambridge University, for instance, has a science and innovation park, where they have nearly 100 occupants or tenants of leading companies which are engaged in a wide range of basic and applied research.

A visit to some UK universities would be a profitable learning experience.

Need for a new vision

Critics of Makerere tend to focus on the university administration, especially the vice-chancellors.

While this is attractive to opportunistic politicians, it is wrong because there are other important governing structures. Principally among these is The University Council, which is politically appointed by the Government. My call for a new vision is more focused on The Council than on the vice-chancellors because there is no record where development issues have been recommended by the council and flouted by the vice-chancellor. As a matter of fact, Makerere has had visionary and sometimes radical vice-chancellors whose vision and drive were often frustrated by the council

Enforce discipline

It is important to enforce academic and professional discipline. Terminate incentives immediately. These have become a weapon of blackmail because they undermine the work ethic, where by a lecturer of whatever status, ignores the terms of the contract. In the case of university lecturers and professors, the job description is to teach, examine and grade students, submit timely grades, supervise student research and undertake individual research and publish so as to advance knowledge. If such individuals are departmental, faculty deans, heads or principals of Schools and Colleges should do their job. It is, therefore, an act of blackmail, when such individuals demand to be incentivised in order to do the very job they signed for in their contracts. For academic staff, research and publications should continue to be the criteria for promotions.

Recommendations

1.   The Government should continue funding Makerere

2.   Students numbers should be capped at 25000

3.   The recommended commercial and investments ventures as well as endowment funds should be managed by qualified investments and financial professional experts.

Efficiently managed strategic investments and commercial ventures should generate additional revenues to supplement government funding as well as reducing reliance on tuition fees.