By Rwakahangi Simon Peter, MCIPS (UK) | MBA (Mak)
On the 7th/August 2021, the owners of private schools cried out to the government to save them from banks that were threatening to attach their property due to non-performing loans. To this, the country watched in shock as the Hon. Minister of Finance Hon. Matia Kasaija responded by advising schools to sell their property to salvage their situation.
What should schools sell? Their bus(es), then how will they transport students on education projects? Should they sell their kitchen(s), classrooms? Or sell their management? I am imagining a scenario where a school head announces the sale of his management!! What would be left if they manage to sell off that?
Schools are no longer social organisations but sources of business, (UNCTAD 2020). The majority of private teachers have never earned a salary since March 2020 – about 18 months. Like musicians, event promoters, bodaboda, taxi drivers’ among others they also need a stimulus package from the government.
There are over 17,859 Private schools, 509,200 private school teachers and over 14.5 Million learners in Uganda. Students are the assets for schools without which there is no income for them (schools).
The biggest question should be: When covid is over, will the schools be able to make money? My answer will be yes because students will be coming, all that schools want is a breathing gap to adjust with the current condition. Additionally, parents are willing to pay and there’s plenty of students (14.5m) and their (school) income is guaranteed. In fact, once business kicks off parents will sleep hungry to pay school fees. Therefore, Commercial Banks and the Hon. Minister should know that students and parents are very precious.
Given the situation at hand exacerbated by the pandemic, the government has an obligation to come up with amicable proposals to deal with the banks and save the schools and the economy at large. Such proposals may include;
First, Government can buy out their loans to bail them out without looking at their book balances. This can be based on the number of students and how often they pay. This can be done on a case by case basis. After all, when schools make profits, they’re taxed.
Second, utilisation of the IMF post COVID-19 recovery Provisions. During the credit crunch of 2007 – 2008, Countries like Britain and America put up a stimulus fund (Quantity of easing – Printing more money) govt put money in Banks and lowered the interest and borrowing rate. It is not possible to print money in Uganda but the government can borrow money from IMF. As such, the IMF has put money aside to help Africa and Uganda is included and on June 28, 2021, the Executive Board of the International Monetary Fund (IMF) approved a 36-month arrangement under the Extended Credit Facility (ECF) for Uganda in the amount equivalent to Uganda Shillings 3.6 Trillion (US$1 billion) to support the post-COVID-19 recovery.
Third, Enforcement of the “Force Majeure”- a provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible e.g. epidemics, war, riots among others. COVID-19 is one of the epidemics that have evidently greatly impacted on the performance of many sectors globally where such provisions could be utilized.
Fourth, Commercial Banks can restructure loans to 10 years, reduce interest rates to like 15% and may advise schools to increase school fees by 1% and pay through the bank’s director advice schools to reduce fees so that they can get more students whichever way they deem appropriate. This is called customer service; the school is a customer, a service provider (Bank) must take care of his customers and must compete with other providers otherwise they’ll be pushed out of the business.
Lastly, at the cabinet level, the Hon. Minister ought to have better problem-solving skills and would have instead sought more time to check the different options available to the banks and schools as well as the capacity of parents to pay schools fees once schools are opened.
Teachers Deserve Better!!
