Kenyan public universities, parastatals face closure in World Bank loan deal
The World Bank has pressed Kenya to liquidate and merge cash-strapped public universities and loss-making parastatals, resulting in the layoff of thousands of public personnel.
Because of duplication of courses and the necessity to decrease spending, the multilateral financier believes Kenya should consolidate its higher education institutions.
The bank intends to shut state-owned companies that have been losing money for three years in a row.
Kenya has 102 public universities and campuses, which had a Ksh6.2 billion ($55.3 million) deficit in the fiscal year ending in June and received roughly Ksh70 billion ($624.9 million) from the Treasury to run their operations.
Merging universities and campuses, as well as evaluating academic curricula, would necessitate the layoff of some employees. A total of 27,000 people work at public universities, including 9,000 lecturers.
The World Bank’s effort to close state universities and enterprises was exposed in a government advice after the fund’s board approved multibillion-shilling loans to sustain the country’s budget and help the economy recover from the Covid-19 pandemic’s consequences.
In recent years, public institutions have faced financial difficulties as a result of fast development and a drop in student enrollment.
They are required to undergo cost-cutting changes in order to become financially sustainable.
The number of public institutions and campuses increased from 49 in 2010 to 204 in 2017, but dropped to 102 last year.
Since 2016, multiple campuses have closed across the country as a result of the lower entry grade, which has had a negative impact on the lucrative parallel degree programs where students pay market rates.
The reduction in the number of Kenya Certificate of Secondary Education exam applicants earning the C+ and above required for university enrollment has hurt universities the hardest, impacting their cash flow.
Students enrolled in parallel degree program courses had produced billions of shillings for the schools over the years.
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