Public Universities Debt Doubles to Sh75 Billion in Two Years Amid Funding Model Delays
Public universities collectively owe statutory bodies and other creditors a total of Sh75 billion in pending bills, a figure that has doubled in the span of two years, posing a significant risk to their operations due to accumulating interest.
The government’s transition to a new funding model, introduced less than a year ago, is facing challenges. Delays in disbursing funds to cash-strapped universities are hindering the model’s effectiveness.
The Universities Fund (UF) has received only Sh7.97 billion out of the awaited Sh11.9 billion from the exchequer for first-year students as of last week.
The CEO of the UF reported that public universities have received promissory letters, which assure immediate disbursement upon receipt of funds by the agency. However, continuing government-sponsored students in private universities are dropping out due to unpaid tuition fees.
Although the Higher Education Loans Board (HELB) has disbursed money for students’ upkeep, the Universities Fund has not provided funds for tuition, raising concerns about the model’s sustainability, especially with an expected increase in student numbers this year.
Julius Melly, Chair of the National Assembly’s Education Committee, has instructed the Principal Secretary for University Education and Research, Beatrice Inyangala, to assess the model’s sustainability as student enrollment rises.
This information surfaced during a recent meeting in Naivasha, where vice chancellors and deputy vice chancellors (academics) discussed universities’ preparedness for implementing the competency-based curriculum (CBC), organized by the Commission for University Education (CUE).
In the past year, records indicate that 32 public universities have accumulated over Sh8 billion in pending bills. However, the Ministry of Education is planning to waive the billions owed to the Kenya Revenue Authority (KRA) in Pay-As-You-Earn (PAYE) remittances.
Pending bills, including debts of Sh75 billion, are currently under audit, and the Ministry of Education aims to clear them in the coming months. PS Inyangala stated that discussions are ongoing with the Ministry of Finance to address the pending bill issue and seek waivers for statutory deductions.
Under the new university funding model, there’s relief for public universities, with an increased budgetary allocation of Sh82 billion for the 2023–2024 financial year.
Public universities’ debts to KRA include Sh20 billion in unremitted PAYE, Sh24.6 billion in pensions, and approximately Sh10 billion unpaid to various suppliers.
The climbing debt crisis has affected universities such as Egerton University, which, by 2023, had accumulated a debt burden of Sh9 billion. Kenyatta University leads the pack with Sh11.7 billion in pending bills, followed by Egerton University at Sh9 billion.
While plans to waive part of the pending bills bring relief to public universities, their financial challenges remain a significant concern in the education sector.
Public Universities Debt Doubles to Sh75 Billion in Two Years Amid Funding Model Delays
