Government to write off 60B debt owed to universities
3 min read
Government through Ministry of Education engaging the Treasury on ways to waive part of the Ksh. 60B that public universities owe KRA
Government through Ministry of Education engaging the Treasury on ways to waive part of the Ksh. 60B that public universities owe KRA.
With the universities facing a financial crisis, the ministry admitted that the higher learning institutions could not afford to pay all their pending bills.
This came as the CS for Education, Ezekiel Machogu said that a committee from the ministry and Treasury had been formed to look into the pending bills.
Machogu noted that the pending bills had accrued in the last five years, with the universities unable to pay KRA, PAYE, and workers’ pension schemes.
Machogu said the pending bills totaling to Sh62 billion had accrued in the 32 public universities over the last six years due to inadequate funding due to decline in admissions for parallel degree programmes, through which varsities were raising their own revenues.
Machogu said that due to inadequate funding, only 68 per cent of the total funding required by public universities was disbursed in that period, leading to accumulation of debts.
He blamed this on the old funding model for the universities, which saw students undertaking expensive courses like Medicine get the lion share of the funds.
“Universities have pending bills of around Ksh 62B and we are working with the national government on how KRA can waive some of these bills,” he said.
The CS was addressing the press in Lake Naivasha Resort after meeting the Senate committee on education, where he said that the new funding model would solve challenges in the universities.
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Machogu said at the same time that the Ministry had changed the capitation formula, with schools getting 50 percent in the first term, 30 percent in the second term, and the last in the final term.
At the same time, the CS noted that they were working closely with TSC to address challenges facing teachers and the education system.
On his part, the chair of the Senate committee, Joseph Nyutu, lauded the Ministry of Education for the new university funding model, noting that all poor students will benefit.
He said that the Ministry had also assured them that schools with special needs would be the first to get capitation fees under the new funding model.
Public universities largely rely on government subsidies to run their operations, but the high number of admissions put a financial strain on the institutions on the back of inadequate funding and delayed disbursement of money by the government.
Under the current financial year (2022/23), the National Treasury allocated about Sh80 billion) for higher education although the universities had requested for about Sh180 billion in their budget plans, which they said they needed in order to function effectively.
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