This archive report was first published on 6 September 2021.
Kenya's Public Universities Face Financial Crisis ¶
As of April 2021, the debt of Kenya's public universities stood at Sh56.638 billion, according to the Universities Funding Board (UFB). The debt is largely comprised of unremitted statutory deductions that have accumulated penalties.
The revelation comes at a time when Kenyan universities are grappling with 38,973 unfilled slots, dealing a blow to the institutions' already falling revenues. The public universities have outstanding remittances to the Kenya Revenue Authority, the National Hospital Insurance Fund, the National Social Security Fund, pension schemes, insurance companies, and saccos.
According to the Sacco Societies Regulatory Authority (Sasra), public universities and tertiary colleges are the greatest culprits in failing to timely remit the deductions due to deposit-taking saccos. As of September 2020, the institutions owed Sh2.95 billion, which is equivalent to 58.41 percent of the Sh5.05bn owed to saccos.
University of Nairobi vice-chancellor Stephen Kiama revealed in July that the institution owed the Kenya Revenue Authority Sh7.2 billion and had staff pension arrears of slightly more than Sh4 billion. Kiama attributed the debt to the university's failure to cost its services, leading to undercharging students who enrolled in parallel degree programme courses.
The cash flow challenges for universities have been made worse by the sharp decline of students enrolling for the parallel degree programme courses over the past four years. Decreasing State capitation to universities is linked to the rapid increase in institutions over a short period and reduced government revenues.
The International Monetary Fund has pushed Kenya to reform its State-owned institutions, including cutting duplicate roles and trimming the headcount. Kenya is committed to a financial evaluation of three State universities and six parastatals, namely Kenya Airways, Kenya Power, the Kenya Airports Authority, Kenya Railways Corporation, Kenya Electricity Generating Company, and the Kenya Ports Authority.
