Egerton University's financial burden hits Sh9 billion mark

Egerton University Njoro Campus main gate

Photo credit: Francis Mureithi | Nation Media Group

The financially battered Egerton University debt burden continues to balloon and has hit the Sh9 billion mark and has insufficient funds to run its operations.

This debt includes pending bills as of June, with management citing the pandemic as the main reason for the financial distress.

The Njoro-based campus depends on the exchequer and in the current financial year, the government capped Egerton's annual budget at Sh3.7 billion against a requirement of Sh5 billion, leading to a deficit of Sh1.3 billion.

As of 2019, the debt burden was Sh6billion but on the onset of the pandemic in 2020 the debt has almost doubled as the management of the Njoro-based campus led by Vice-Chancellor Prof Isaac Ongubo Kibwage made frantic efforts to rescue the sinking institution with little success from the previous regime.

Not even the new government of President William Ruto seems to give the institution any hope of extending the rescue plan which has seen the institution reduce the lecturers' salaries by 40 per cent to keep it alive.

"The Egerton University internal debt has risen from Sh6billion and is now oscillating at Sh9billion and still climbing," said Prof Kibwage who was appointed to the hot seat last year becoming the sixth VC of the 83-year-old institution.

The VC Egerton University like the rest of the public universities has not received money to bail it out from its dire financial trouble.

"The shortage of money at Egerton is still the same as we speak. This is a universal problem and is not unique to Egerton University," said the VC, adding, "What is happening at Egerton is a financial problem that I inherited."

Prof Kibwage and eight university council members narrowly escaped a jail term of 30 days after they disobeyed an Employment and Labour Relations court verdict which ordered the institution to revert the dons' salaries to 100 per cent.

The officials were each fined Sh100,000.

However, Prof Kibwage defended the university's stand over the pay row with the dons saying," we're not refusing to pay our lecturers. The fact is that we don't have money. When other government institutions insist we pay the salaries yet we work for the same government that is yet to disburse the funds."

He added: "When lecturers are paid 60 per cent am also in the same bracket. I'm not paying myself 100 per cent. We're sailing in the same boat. We're all crying. I treat my staff the way I would like to be treated when it comes to matters of salary payment."

He continued: "I'm also owed arrears and if the government pumps in the money to keep us in business I will make sure all the staff are paid their dues. I will not hold that money for more than a day. I'm optimistic ultimately the government will come to our rescue."

"The university has engaged the government. We have a new government in place and it has promised to fix our financial challenge which it knows very well," said Prof Kibwage.

He added: "I have discussed the issue of finances with the new Education Cabinet Secretary Ezekiel Machogu several times and there is hope."

Recently Mr Machogu said that the government would allocate Sh50 billion to public universities to bail them out of the financial mess.

Prof Kibwage blamed the Egerton University Academic Staff Union (Uasu) for having a hidden agenda for his administration.

"I think there is another hidden agenda. The issue is not money per see. We have discussed this matter many times with the union officials. I think most of the things the union is pushing are orchestrated. We have explained to the court why we can't pay. We're not refusing. It's simply that we don't have money."

He added: "The money we owe the lecturers are reflected in their payslips and this means when we receive the money from the government we shall pay them the accruing arrears as indicated in their payslips. We shall not start calculating how much we owe them. We shall pay them immediately."

However, the VC said in the wake of the financial crisis, the university council is exploring other means of dealing with the cash crunch at the university.

Without elaborating further, Prof Kibwage said: "The university council is looking at other means to deal with the financial challenges facing Egerton."

He said the constant legal suits are counterproductive to the institution because students shy away saying, "when this happens I remain with staff with no work and they will ultimately suffer the consequences of redundancies."

Prof Kibwage welcomed the move by the government to reintroduce a self-sponsored students programme at public universities.

"This is a good move because obviously, it will bring some relief to public universities with financial challenges," said Prof Kibwage.

The university postponed the 46th graduation ceremony that was slated for December and will now be held in February 2023.

"We did not have enough students to graduate. We were cleaning up our graduation list. We shall have our next graduation ceremony in the first week of February 2023," said Prof Kibwage.

The majority of public universities are in red due to underfunding, embezzlement and failure to generate their revenues and have accumulated debts amounting to Sh56 billion as of June.

Many of them are also struggling to meet their obligations in form of pension funds remittances, paying statutory deductions, suppliers and contractors, and remitting staff loan deductions to lenders.

The financial challenge has seen the Auditor-General describe the affected public universities as "technically insolvent".