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Public universities at risk of collapse as they owe government agencies Sh56.1 billion

Public universities face a cash crunch, risk collapse as they owe government agencies Sh56.1 billion.

As of June 30, 2022, public universities jointly owe government entities and pension schemes roughly Sh56.1 billion due to their current financial predicament.

This includes, among other things, money owed to the Kenya Revenue Authority (KRA), pension plans, part-time professors, Saccos, National Hospital Insurance Funds (NHIF), National Social Security Fund (NSSF), and loan deductions, according to Universities Fund CEO Geoffrey Monari.

“Currently, our universities are facing a profound financial crisis. The aftermath of the Covid-19 pandemic still lingers,” said Monari, during a media workshop on Friday, October 28.

Similarly, he said that the 100 percent transition for students attaining C+ (plus) and above has increased access to universities, amidst financial strain.

Monari explained that under the Differentiated Unit Cost (DUC), students placed by Kenya Universities and Colleges Central Placement Service (Kuccps) to universities are expected to be funded by the Government up to 80 percent of the unit cost.

He, however, said lack of sufficient funds saw an allocation of 66 percent in public universities in Financial Year 2017/18 and further reduced to 48.11 percent and 21.94 percent for private universities as at 2021/22 from 44 percent in 2017/18.

He also said that the current budget for Government Sponsored Students (GSS) is about Ksh47.4 billion out of which, Ksh3.4 billion is for 78,443 students placed in private universities while Sh44 billion for 356,188 students in public universities.

“The expected number of GSS to graduate is 92,950 in the Financial Year, which accounts for a budget of about Ksh12.6 billion at the prevailing rate of 48.1 percent.

Monari also explained that the total number of government-sponsored students in public and private universities is 434,631 students in DUC with a requirement of Ksh87.3 billion but the available budget is Ksh47.4 billion.

“There exists a budget deficit of Ksh39.9 billion. With the number of graduates expected to exit universities in the 2021/22 year standing at 92,950 students, Ksh12.6 billion will be freed for the incoming cohort,” he explained.

For the 2022 group, the funding requirement of 145,145 students is Ksh32.7 billion while the available funds are Ksh12.6 billion.

“The incoming cohort is larger than the graduates exiting by 52,195 students hence it is expected that the funding requirements will increase,” Monari stated.

He called for the need to explore funding of Public universities and restore their status as they’re now at risk of collapse.

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