Public universities have found themselves in deep financial straits blamed on falling student population, mismanagement and low State funding. In recent months, a number of universities have had to scrap some courses and close satellite campuses to cut cost of operations.
Kenya has 102 public universities and campuses — which posted a deficit of Sh6.2 billion in the year to June and received nearly Sh70 billion from the Treasury to run their operations.
The University of Nairobi (UoN) and Kenyatta University have dipped into a combined Sh4.3 billion financial deficit, underlining the cash flow problems at the institutions that have seen them seek to raise student fees.
The Treasury revealed to Parliament that UoN had a deficit of Sh2.17 billion in the year to June, up from Sh1.62 billion a year earlier.
Egerton university had to close ordering their students to vacate the institution’s premises after their lecturers staged demonstrations over pay issues since June last year, up to now the university is yet to communicate any resumption plans but only revealing through a memo to its staff over lack of state funding for the month of December henceforth.
According to business daily Egerton University needed Sh1.3 billion to break even while Moi University was short Sh1 billion while the Technical University of Kenya had a shortfall of Sh769 million to remain operational
Kenyatta University’s deficit dipped to Sh2.13 billion in the period under review from Sh1.3 billion with the institution relying on short-term loans to finance its operations.
The cash-strapped universities have been unable to remit statutory deductions like pensions and tax, prompting warnings from the Kenya Revenue Authority amid fears of asset seizures.
The notice from Egerton will worsen the situation at the university amid calls for strikes by workers over what they have termed as sustained and systematic industrial injustices and employer cruelty.
Kenya has come under pressure from the World Bank to close and merge the cash-strapped public universities and loss-making parastatals in what would see thousands of public servants lose their jobs.
The multilateral financier reckons that Kenya should merge the institutions of higher learning because of duplication of courses and the need to cut spending.
Vice-chancellors have since last year been pushing the government to increase fees nearly three times, in a bid to ease the cash flow woes bedeviling the institutions.
“Universities in Kenya are in a serious financial crisis because there is a continuous decline in
a serious financial crisis because there is a continuous decline in government funding amidst increased cost of administering education,” the Fund says in a report.
The data shows that the allocation in the current financial year will cater for 49.51 percent of the tuition cost per student, compared to the required 80 percent. The universities and students foot the remaining costs.
The reduced allocation per student has seen the funding deficit more than double in the two years, exposing universities already hit by the reduced enrolment of Self – sponsored students.
The World Bank has advised the government to shut down and merge universities faced by financial storms to cut down spending thus the five listed universities risk closure.