A financial crisis is looming at the University of Nairobi after the government reduced its annual funding from Sh6.2 billion to Sh4.5 billion, effective July 2017.
The reduction is a result of the introduction of a new funding formula, known as differenced unit costs (DUC), which will be implemented in July. Under this formula, funding for public universities will be based on the cost of running academic programs rather than the number of students enrolled.
This means that universities offering courses such as medicine, dentistry, engineering, architecture, and law will receive more funding for tuition compared to those offering arts and humanities.
The DUC funding formula is determined by the actual costs of running a program and ensures that universities receive realistic financial allocations to fund their respective academic programs.
Staff Layoffs and Program Closures ¶
The University of Nairobi has warned that the reduction in government funding will lead to staff layoffs, closure of core university programs, and possible shutdown of university operations.
According to a report by the university, the implementation of DUC will have a significant impact on the university's budget, as it was carried out without university involvement. The report also states that the figures used to determine the differentiated unit cost did not take into account the university's input.
The university expects a shortfall of Sh1.7 billion per year, which translates to Sh142 million per month. This will result in an inability to fund critical programs, including staff costs, which amount to Sh770 million per month. The expected staff costs shortfall per month is Sh392 million, which may lead to possible staff layoffs.
Task Force Recommendations ¶
The new directive is based on the recommendations of a task force on university funding, chaired by Prof Francis Aduol, Vice-Chancellor of the Technical University of Kenya. The task force found that the cost of training a student varies significantly depending on the program. For example, it costs Sh600,000 to train a dentist, while medicine costs Sh576,000, veterinary medicine costs Sh468,000, pharmacy costs Sh432,000, and a general arts degree costs Sh144,000.
Currently, the government allocates a uniform figure of Sh120,000 for every student enrolled in a public university, a system that has been in place for over 20 years.
The recovered account cited reporting by Nairobi News.
