Should Makerere Seek Alternative Sources of Funding? Part I

Early this week, it was reported that Makerere University is facing a huge debt of UGX 21 billion, and followed up with pleas to have the government take over the huge wage bill.

The University has repeatedly faced financial uncertainty, amidst academic staff opting for industrial action to enforce wedge increaments. On the other hand, the students have gone up in arms on annual basis to protest any suggestion at increasing their tuition fees.

This challenge has not hampered Makerere alone, as other public Universities have been faced with financial difficulties of their own. Kyambogo has also had to deal with staff strikes as they call for a pay raise. Mbarara University has been affected by brain drain, on a frequent basis.

The private universities like Uganda Christian University in Mukono, Victoria University and Uganda Martyrs’ University Nkozi have steadily grown and can maintain their academic staff comfortably, as their student base has grown.

At this rate, the public Universities are faced with the none too pleasant scenario of lagging behind in research and quest for the brightest students. Other funding options needed to be considered to keep them competitive.

The Importance of the “60% policy”

For about six years, the Council of Makerere has been pushing for a payment policy whereby students must deposit 60% of their semester tuition fee by the end of the sixth week of that semester. This policy, though strenuous, ensures available cash flow to enable the University manage its daily operations.

The policy has faced persistent (and sometimes violent) opposition, for the obvious reasons of majority of students coming from impoverished backgrounds. Therefore, they tend to receive the money at the conclusion of the semester (students can’t sit for exams without completing their tuition).


Endowment funding is hugely popular in American Universities. According to Investopedia, an endowment is a financial asset, in the form of a donation made to a non-profit group, institution or individual consisting of investment funds or other property that may or may not have a stated purpose at the bequest of the donor.

In similar fashion, the Makerere University Holding Company was established in 2014. The Vice Chancellor Prof. John Ddumba-Ssentamu said the company is tasked with generating revenue from the University’s land in Makindye and Kololo, as the professors concentrate on research and teaching.

American universities control endowment funds that they use to finance sizeable portions of their annual budgets. The funds are sourced from alumni or friends of the university

[related_posts] Harvard University, with the richest endowment at US$ 37 billion, has been capable of financing ambitious infrastructure projects on campus, attracting world renown researchers to their faculty, and providing scholarships to wider ethnic communities which has diversified their student base.

On the African continent, the University of Cape Town in South Africa has one of the largest endowment funds in Africa, at about R 2.2 billion (US$ 150 million). Coincidentally, the University has been consistently ranked among the top 3 on the continent.

The public universities could start slowly, with restricted endowments that fund specific areas of the institution. For example, in 2014 Makerere renamed the School of Economics as The Mwai Kibaki School of Economics, with an endowed Chair in Economics. The salary of the occupant of this chair can be covered by a fund in the benefactor’s honour.

With a long list of distinguished alumni across the continent, Makerere stands above the rest in pulling off this source of income. The likes of Mbarara University of Science & Technology and Busitema University will be curtailed by their short histories, and limited number of courses that ensure they churn out a small number of students per year.