Public varsities on the breaking point as debts hit Sh72 billion

Public universities in the country are in a financial crisis, steering on the edge of collapse under a staggering Sh72.2 billion debt.

The University of Nairobi leads with a debt of Sh13.2 billion, followed by the Technical University of Kenya (TUK) at Sh11.1 billion.

Kenyatta University has Sh10.6 billion, Egerton University with Sh10.1 billion, and Jomo Kenyatta University of Agriculture and Technology Sh9.13 billion.

These debts stem from unremitted statutory deductions, unpaid contractor fees, pension arrears, and years of pending bills, paralyzing routine operations and triggering near-constant industrial action.

It also emerged that the budget cut will hit institutions of higher learning the hard way.

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The Higher Education Loans Board (HELB) is feeling the pressure with a Sh36.6 billion funding deficit for loans and an additional operational deficit of Sh1.4 billion.

The details emerged on Wednesday when Basic Education Principal Secretary Julius Bitok appeared before the National Assembly Education Committee.

Bitok who represented the sector before the Committee, said students joining universities over the next three years need Sh43.68 billion in funding, yet the government only allocated Sh16.9 billion.

“The funding gap analysis shows that over 468,237 students are at risk of not receiving financial support through loans,” Bitok warned.

He further emphasized that most of these students come from low-income households and were to benefit from the government’s new equity-based funding model.

“We are here to plead with you to assist in getting the funds. If you see these deficits, they are affecting the operations of HELB and these other agencies. If we can get the resources we require then students will get loans in time,” Bitok said.

Stakeholders point to confusion arising from this new student funding model, reduced institutional allocations, and skyrocketing operational costs.

The National Assembly's Education Committee, while attempting to intervene, expressed deep concern. 

A July 2022 parliamentary report stated that most of the public universities are in dire need of finances to sustain their operations, and the envisaged university reforms being undertaken have been inordinately slow.

However, in response to the funding crisis, universities have slashed academic programmes, frozen hiring, stalled research, and cut student services.

Infrastructure development has also ground to a halt, with unpaid contractors abandoning projects.

Moi University recently sent home over 900 employees under a redundancy programme. 

Those affected include 372 members of Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers (KUDHEIHA).

Another 380 from Kenya Universities Staff Union (KUSU) and and 120 Universities Academic Staff Union (UASU)-affiliated lecturers.

Even pensioners and lecturers across institutions continue to pursue unpaid dues, often in vain.

Moi University, once a giant in Kenya’s academic sector, is a symbol of the rot.

With a debt of Sh7.83 billion, the institution has experienced extended strikes, salary delays, and even a three-month closure following protests by teaching and non-teaching staff.

The government intervened with a Sh2.9 billion bailout.

During a visit to Moi University last year, the National Assembly Education Committee Chair who is also Tinderet MP Julius Melly acknowledged the situation urging for a bail-out.

“Some Sh300 million will go towards scholarships this October, in addition to Sh217 million disbursed in August,” he said.

The Education stakeholders now say that the institutions are crippled by a toxic mix of government under funding, internal inefficiencies, and poor financial management.

On Wednesday, Melly pushed for a probe into irregularities in budget allocations.

“What is each university having to ensure that you are paying these pending bills? Give us the road map on how they are paying,” demanded Julius Melly.

Teso South MP Mary Emase said; “We are spreading funds in different projects and none of them gets to be completed. Where is the value for money?"

There are also concerns over unjustified allocations with Melly questioning why institutions like the University of Eldoret and the Open University received more funds than what they requested.

“The Budget Policy Statement had Sh480 million and now has been given almost Sh800. Why this parity?” he posed.

Delays in payments to suppliers and staff have become a norm, with morale in a tailspin across campuses.

Still, despite this commitment, the government insists that no university will be shut down—a promise that rings hollow as institutions implement painful austerity measures, the most severe being staff retrenchments.

The Technical University of Kenya has openly admitted it cannot meet its wage bill. 

Appearing before Parliament’s Public Investment Committee on Education and Governance, Vice Chancellor Benedict Mutua gave a grim account:

“From 2013, under the former vice-chancellor, the staff have not been paid their gross salaries. The money we got could not support gross salaries as well as enable us to pay salaries,” he said.

TuK receives only Sh63.3 million monthly against a wage bill of Sh272 million. Statutory deductions such as NSSF, NHIF, housing levy, and SACCO contributions have gone unpaid for years.

The institution, which employs 1,820 people serving 14,200 students, is now considering mass layoffs.

A report by Auditor General Nancy Gathungu continues to flag Kenya’s public universities for worsening financial positions. Apart from the top five indebted universities, others like Masinde Muliro (Sh1.25 billion), Kisii University (Sh1.04 billion), Maasai Mara (Sh805 million), and even smaller institutions like Kibabii (Sh455 million) and Laikipia (Sh283 million) are drowning in debt.

Newer institutions, which were expected to bring higher education closer to remote communities, are not spared. Turkana University College owes Sh10.8 million, while Allupe University has Sh16.2 million in unpaid bills.