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The state will not bail out cash trapped Public Universities, urged to be innovative

Public Universities have been urged to be innovative and adopt revenue-generating mechanisms as govt funding hangs in the balance.

Universities have been urged to use novel strategies for resource mobilization in order to meet the current financing problem in the sector.

Public universities’ poor financial standing has been attributed to underfunding by the National Treasury, which has accelerated universities’ financial decline.

However, according to University Fund CEO Geoffrey Monari, relying on the government to save colleges may not be the best option because of competing interests.

“The most ideal situation is for the government to provide additional funding and if this was the case we would have an additional allocation of Sh20 billion but as we all know they are many competing issues,” he said during the weekend.

The board, which provides subsidies to universities and other institutions of higher learning, had a budget deficit of Sh39.9 billion in the most the recent fiscal year 2021–2022.

According to the information provided by Monari, the institution needed to support 434,631 public and commercial entities with an allocation of Sh 87.3B.

However, they were given a budget of Sh47.3 billion by former National Treasury Cabinet Secretary Ukur Yattani, which was only around half of the total amount they needed.

“In the last financial year, we had a budget deficit of Sh39.9 billion and that is where the rubber began to hit the road and that’s why you see the high learning institutions have immense challenges,” he said.

Since 2018, the Jubilee government has been pushing for a 100 percent transition policy.

However, the funding disbursed by the exchequer to higher learning institutions has not been commensurate to the number of students joining universities.

In addition to this, the number of students joining universities is higher compared to those who are joining higher learning institutions.

In the last financial year, 92,950 students graduated from the universities who accounted for Sh 12.5 billion of the fund’s allocation.

With the budgetary allocation remaining the same, the university fund still remains with the challenge of underfunding as the number of students joining universities is higher.

“We still have a shortage because the ones who are coming in will be more than the ones who are exiting which means that the incoming cohort is larger by 52,195 students and yet the funding remains the same,” Monari stated.

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

In 2022, a cohort of 145,145 students required an allocation of more than Sh32 billion hence the push for additional funds by the government.

“We are looking at a shortfall of more than Sh20 billion with the number of incoming cohort larger than exiting graduates being 52,195 hence the expected fund increase,” Monari stated.

Since the financial year 2017/2018, the government has been failing to meet its requirement of funding students in universities.

The government is expected to fund 80 percent while the remaining 20 percent is to be funded by students.

However, the allocation started at 66 percent in the year 2017/2018 and was later reduced to 48.11 percent in the year 2021/2022 and is currently at 44 percent due to the financial situation in the country.

Currently, public universities are facing a financial crisis as they collectively owe government agencies and pension schemes about Sh56.1 billion.

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