Think tank formed to rescue public universities from financial woes

Student debt

The public universities have to grapple with maintenance of the many campuses opened all over the country.

Photo credit: File | Nation Media Group

What you need to know:

  • The team will be expected to determine the debt burden of universities and how it morphed to that level.
  • It is expected to conclude its work by July 19 2021 and thereafter submit its report after two weeks.

The government has appointed a high-powered team of intellectuals and university administrators to come up with concrete solutions on how to get public universities out of the financial mess they are currently steeped in, a mess that threatens operations in many of them.

The think tank, which will be chaired by Prof Egara Kabaji, a former deputy vice chancellor at Masinde Muliro University of Science and Technology, will be expected to develop a funding framework that will rescue public universities from the financial depression they are in.

“Kenyan universities are in a financial crisis and cannot effectively meet their financial obligations. The crisis is not temporary instability, it is a permanent phenomenon that requires government mitigation,” Simon Nabukwesi, the principal secretary for University Education and Research said in his appointment letter.

The team will be expected to determine the debt burden of universities and how it morphed to that level. It is expected to conclude its work by July 19 2021 and thereafter submit its report after two weeks.

Many universities have already been flagged by the Auditor General for being technically insolvent for a number of years. They have outstanding debts such as pension, sacco and unremitted National Hospital Insurance Fund deductions.

Last month, the International Monetary Fund also placed the University of Nairobi, Kenyatta University and Moi University on its radar over their financial instability. The three institutions will be expected to carry out wide-ranging reforms to stay afloat and this may lead to job losses as bloated payrolls are among their biggest expenditures.

Debt holes

The think tank will categorise universities according to the extent of their debt burden and come up with specific frameworks on how to pull them out the debt holes. They are also expected to suggest practical and sustainable revenue streams outside of government funding that the universities can adopt.

“This is a very important task. There are some universities in ICU, HDU and some in the general ward while others are healthy. We’ll analyse them and ask what made them get to that level. We are going to ask tough questions and look at the funding model for universities,” Prof Kabaji told Higher Education, while exuding confidence that the think tank will come up with actionable policy statements.

A recent suggestion by the Vice Chancellors Committee to increase tuition fees in public universities threefold, from Sh16,000 that has been in place since 1989, to Sh48,000, has been roundly opposed by students and also by the National Assembly Committee on Education and Research, which is chaired by Busia Woman Representative, Florence Mutua.

The VCs are also pushing for a differentiated unit cost formula, where fees and government subsidies would dependent on the cost of offering the courses. They argue that most universities offering science, technology and mathematics courses have incurred debts as they spend more to offer the courses than the arts-based courses.

Universities have found themselves in the current financial mess majorly, following the collapse of the self-sponsored programmes that used to mint billions of shillings after reforms in the administration of the Kenya Certificate of Secondary Education (KCSE) led to reduced number of students qualifying for university admission. Prior to the reforms, there was rampant cheating in national examinations that produced an unusually high number of university qualifiers.

Expansion plans

The universities also have to grapple with maintenance of the many campuses opened all over the country as they embarked on expansion plans to compete for the many KCSE graduates who could not get government sponsorship for university education.

Since 2016, the government has been sponsoring all Form Four leavers who score above C+, the minimum requirement for university admission. Only those who opt to pursue courses different from the ones they get admitted to enroll in the self-sponsored programmes.

UoN, KU and Moi University, for example, have a combined workforce of over 12,000 employees, both academic and non-teaching, that gobble up billions of shillings yearly in wages. UoN has the largest wage bill spending about Sh8.7 billion on personal emoluments, followed by KU (Sh5.6 billion) and Moi University at Sh4.69 billion according to recent audit reports.

Their expenditure on staff salaries and associated expenses is skewed against their income and any reforms to balance this will most likely lead to job losses. UoN has about 5,500 employees, 1,700 of who are academic followed by Moi University with 4,000 and only about 900 being academic staff. KU has about 3,000 staff on its payroll, 1,000 being faculty. 

In February, Ms Mutua’s committee recommended that the Ministry of Education introduce a “five-year moratorium on establishment of new universities, colleges or campuses as well as explore the possibility of merging non-viable campuses, rationalisation of programmes and institutions to create centres of excellence.”