Varsities seek Sh18bn waiver as Azimio rejects plans to increase fees

Opiyo Wandayi

National Assembly Minority Leader Opiyo Wandayi. He told the Kenya Kwanza administration to come up with “sustainable ways” of funding public universities and pick managers “on merit and not on the basis of tribe”.

Photo credit: Rushdie Oudia | Nation Media Group

At least 35 vice-chancellors are seeking a waiver of Sh18 billion in Pay As You Earn (PAYE) tax owed to the Kenya Revenue Authority (KRA) as part of strategic interventions needed to rescue cash-strapped public universities.

The vice-chancellors also want the National Treasury to start clearing Pension bills totalling Sh19.6 billion in instalments.

They made the demands on a day the Raila Odinga-led Azimio la Umoja One Kenya Coalition opposed plans to triple university fees from the current Sh16,000 to Sh48,000, arguing the move would lock many learners out of higher education.

The coalition said instead of raising fees, the government should pay all monies it owes the institutions to enable them to stay afloat.

The coalition, through National Assembly Minority Leader Opiyo Wandayi, told the Kenya Kwanza administration to come up with “sustainable ways” of funding public universities and pick managers “on merit and not on the basis of tribe”.

The coalition has further rejected plans for the selective provision of loans to students, saying the plan is prone to abuse.

“We state categorically that Azimio is vehemently opposed to plans to triple university fees and will vehemently oppose such a move. Our position is that the government must come up with a model for proper funding of universities and appoint good managers on merit, and not on the basis of tribe, to manage our universities,” said Mr Wandayi.

Sh60bn debts

The public institutions have accrued debts amounting to Sh60.6 billion in staff pensions, Pay As You Earn tax, National Hospital Insurance Fund premiums and other statutory dues.

Speaking in Mombasa, the vice-chancellors suggested interventions aimed at pulling the institutions out of their current financial hole. The proposals will be presented to the Cabinet on March 31, 2023, by Cabinet Secretary Ezekiel Machogu.

“The national government should take the decisive and necessary decision to write off the pending PAYE bill amounting to Sh18 billion owed to the Kenya Revenue Authority by public universities. The state should remit money to pay the 2017-2021 Collective Bargaining Agreements (CBA) in full, including arrears amounting to Sh2.9 billion,” said Universities Fund chief executive officer Geoffrey Monari.

For future CBAs, the scholars said the government should peg salaries on existing scales or wait until there are funds to implement CBAs.

They further urged the state to fund new development projects to completion to avoid stalling due to the suspension of budget allocations.

The vice-chancellors want the Universities Academic Staff Union (Uasu), Kenya University Staff Union (KUSU) and Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers (Kudheiha) to stop any CBAs until pending issues are resolved.

“Set up a committee to come up with a strategic plan and research model,” said the vice-chancellors.

Further, they said universities should be allowed to determine student fees while the Ministry of Education should only determine the caps. 

Students joining public universities may have to fork out Sh48,000 after the State's proposed fee increment to deal with the financial challenges being faced by the institutions of higher learning.

“Raise students’ share of fees from the current Sh16,000 to a minimum of Sh48,000 and a maximum of Sh96,000 per year. There should be a two-tier funding structure: one is base funding and the other is based on university performance. Fees should be shared among three entities: students, universities and the national government.

Deliberate woes

Prof Stephen Kiama from the University of Nairobi painted a grim picture of how the institution found itself in a financial hole accusing the Ministry of Education of designing their woes deliberately.

“Some people say we drowned due to governance but that’s not the issue, I have to clarify this matter. It was designed and deliberate. CBA’s were negotiated, and financed in retrospect and not forward, what do you do? Do you raise salaries and continue paying higher salaries? You cannot do that,” added the don.

Prof Kiama said students that were passing were reduced in number and only a few were available for admission to the public universities.

“But they were also taken to private universities so that there’s none available particularly for the public institutions. Many universities were affected in a big way. Capitation was reduced, in UON it was reduced by Sh1.7 billion just like that, Treasury resisted but the Ministry was adamant in reducing our capitation from Sh6.2 billion to Sh4.5 billion,” explained Pro Kiama from the UON.

On pension, the don said CBA’s were negotiated but funds were not availed. UON uses around Sh800 million to pay salaries monthly.

“Yet the government gives Sh464 million, out of which Sh186 million goes to PAYE, you are left with Sh200 million. How do you pay for security, cleaning among other things? The problem is big,” said Prof Kiama.

In a separate interview, CS Machogu admitted that the universities are currently struggling while assuring them of state interventions.

“We are giving universities capitation, however, when numbers went down, parallel program module 2 died. Module 2 used to be a major revenue stream for universities, but when it died, it left the institutions surviving on the exchequer. Many universities are not able to attract adequate funds through research and innovations,” he said.

He denied allegations that the rising number of candidates with C + (plus) and above in the 2022 Kenya Certificate of Secondary Education was designed to reintroduce parallel programs to boost cash flows for cash-strapped universities.

“In 2015-2016 thereabout, we had around 169,000 candidates with C+(plus) the year after, the number was reduced to 70,000. Is it a normal graph or not? Currently, we have 173,000 students with C+ (plus) out of the 881,416. If you look at the percentage of those that have above C+ comes to 19 per cent,” he said.

The institutions further proposed setting up businesses on their idle lands and renting them out to students and other entrepreneurs while also ensuring 100 per collection of school fees.

The vice-chancellors will also enhance public-private partnerships for research and capital development projects and further share infrastructure among universities to minimise costs.

They want Vice Chancellors and their Deputies to be appointed by the respective university councils rather than the Public Service Commission.

They further added that chancellors and council members should be recruited through direct appointment rather than competitively.

“CBA issues should be handled by the Council rather than by the SRC who do not fully appreciate the context of individual universities. Approval of academic programmes should strictly be the prerogative of the Senate, without interference from professional bodies,” they added.