IMF report identified three top public universities, Kenyatta, University of Nairobi, and Moi as among the top state-owned agencies carrying the biggest financial risks.
Due to fast development and a reduction in student enrollment, public institutions have faced financial difficulties in recent years.
The number of public institutions and campuses increased from 49 in 2010 to 204 in 2017 but fell to 102 last year.
Last year, the institutions ran a Sh6.2 billion deficit and received Sh70 billion from the Treasury to fund their operations.
Due to financial difficulties, some university presidents have sought loans from banks and other financial entities.
The three top public universities–Kenyatta, University of Nairobi, and Moi–were listed by the IMF as among the top state-owned entities facing the greatest financial concerns.
As part of the terms of a Sh234 billion loan to Kenya, the agency requested that the country reform its three main public institutions to save them from financial ruin.
It proposed that the institutions be closed due to course duplication and the necessity to decrease costs.
Kenyatta University and the University of Nairobi both have financial deficits of Sh4.3 billion, highlighting the cash flow issues that have forced them to raise student fees.
According to Treasury data, the University of Nairobi recorded a Sh2.17 billion deficit last year.
The university has undergone some modifications under vice-chancellor Stephen Kiama, including the elimination of five deputy vice-chancellor positions and the replacement of two associate vice-chancellor positions.
In the same year, KU’s deficit shrank to Sh2.13 billion, owing to the institution’s reliance on short-term loans to fund its activities.
KU requested a Sh450 million loan in 2020 to deal with a massive deficit. Moi University had to close its doors and send students home last year because to financial difficulties.
In statutory deductions, the institution owes nearly Sh1.06 billion.
In order to address the financial problem, the government recommends that the institutions undergo cost-cutting changes in order to become financially sustainable.