Universities owe different agencies more than Sh50 billion as a funding agency insisted that it will not bailout institutions that are struggling unless they implement reforms to make them financially sustainable.
Universities Fund CEO Geoffrey Monari disclosed that collectively, the institutions have a debt of Sh56.1 billion.
The amount is owed to the Kenya Revenue Authority (Sh13.7 billion), pension schemes (Sh18.6 billion), NHIF (Sh2 million), NSSF (Sh139 million), loan deductions (Sh1.4 billion), sacco contributions (Sh4.2 billion), suppliers (Sh4.9 billion), part-time lecturers (Sh4.6 billion), contractors (Sh1.5 billion) and others (Sh10.7 billion).
The managements of universities like Moi and Egerton which have been struggling to stay afloat have called upon the government to come to their rescue.
“You must stop the bleeding first. The issue isn’t bailout. Have you sealed the loopholes that got you there?” said Mr Monari at a forum in Naivasha.
Board member and chairman of the audit and risk committee, Prof Walter Mwanda, asked universities to rationalise their academic to non-academic staff ratios.
“Anyone who wants their universities to be resuscitated must reform. This must include the curriculum that you offer,” he said. Mr Monari said that they require Sh20 billion to fund university students who sat for KCSE last year.
“For Moi University, we have advised them to use the huge tracts of land productively. Following University Fund advice, Moi University has started growing apples to generate income.”
“Currently, universities are facing a profound financial crisis. The aftermath of Covid-19 still lingers. The war in Ukraine has destabilised various economies and oil prices and supply chain globally,” Mr Monari.
He said the funding requirements for the 2022 cohort of 145,145 students was more than Sh32 billion.
“We are looking at a shortfall of more than Sh20 billion with the number of incoming cohort larger than exiting graduates being 52,195 hence the expected fund increase,” he explained.
Mr Monari said the current budget for government-sponsored students was more than Sh40 billion, with slightly Sh3 billion going to those in public universities.
He added the government had several options, including increasing fees and admission of students as per the available funds.
“However, increase of fees might not be tenable due to the current financial constraints facing many Kenyans,” he added.
To address the shortcomings, Mr Monari advised that only needy students based on their economic situation should be supported, arguing that it will help promote equality in funding.
“Clearly, given that the number of KCSE students qualifying for universities is increasing every year, it is difficult for the government to raise adequate cash to support institutions of higher learning,” he observed.
He said in the financial year 2021/22, the number of GSS in public and private universities was 434,631 with differentiated unit cost requirement of Sh87 billion against available budget of Sh47 billion.
He said the entity had embarked on resource mobilisation activities to support universities and help ease pressure on the government.
Mr Monari revealed that they have engaged various donors and partners willing to support specific programmes like mining, agribusiness and climatic change.