The University of Nairobi, the University of Eldoret and Masinde Muliro University of Science and Technology have received the biggest cuts in State fund allocations for the new financial year in the midst of a financing crisis facing public institutions of higher learning.
Analysis of data from the University Funding Board (UFB) shows that the allocation by number of students or student capitation to the University of Eldoret dropped highest at 38.2 percent to Sh1.21 billion -- from Sh1.96 billion -- followed by that to the University of Nairobi with a 21.3 percent cut to Sh4.31 billion.
Reduced allocation to the universities will worsen their financial woes given that the institutions are also grappling with sharp drops in enrolment on self-sponsored degree programmes that generated billions of shillings over the years.
Overall, student capitation to five of the 10 leading public universities dropped even as the overall allocation to the 39 institutions rose to Sh44.02 billion from Sh43.84 billion as more institutions fight for limited resources.
UFB has raised concerns about the declining student capitation that it now says has fallen to 48 percent of the unit cost.
“Due to lack of sufficient funds, the allocation has been at 60 percent and gradually going lower to about 48 percent in 2022,” UFB says in a brief.
Public universities are grappling with huge payroll gaps and accumulation of debts, a freeze of new development projects and staff layoffs, highlighting the impact of the reduced allocations from the Treasury.
Funds disbursed as student capitation are critical in the running of the universities, accounting for nearly 30 percent of the source of money used to pay salaries and day-to-day utilities.
The institutions have defaulted on statutory deductions like pension, pay-as-you-earn, the National Hospital Insurance Fund and the National Social Security Fund.
Moi University last month announced plans to lay off staff as it seeks to tame a wage bill that eats up over 70 percent of the student capitation while Egerton University has since December been paying staff half salaries.
The University last year hiked tuition and accommodation fees for all new students, becoming the first public university to increase fees in yet another bid to remain afloat.
Masinde Muliro University of Science and Technology was hit with a 15.9 percent student capitation cut to Sh1.47 billion, Technical University of Kenya 15.3 percent to Sh1.67 billion and Moi University 13.6 percent to Sh2.95 billion.
Kisii University is the biggest beneficiary of increased allocations, with its student capitation rising to Sh1.67 billion from Sh1.17 billion, followed by Maseno University which has been allocated Sh1.99 billion from Sh1.69 billion.
Student funding to public universities is based on the differentiated unit cost (DUC), which puts more emphasis on enrolment numbers and groups university academic programmes into 14 clusters, each with a fixed cost.
Under the model, the government is expected to cater for 80 percent of the unit cost while the remaining 20 percent is borne by students and institutions. The number of government-sponsored students joining public universities in the year to June has increased to 356,188 from 324,182 in the year ended June, reflecting a 9.87 percent growth.
This means that the average amount allocated per government-sponsored students will drop to Sh123,586 in the year to June from Sh135,232.
Of the five universities that took a hit on student capitation, only the University of Nairobi posted a drop in the number of State-sponsored students in the period.
The university leads with a drop of two percent to 26,616 government-sponsored students while Masinde Muliro’s numbers marginally dropped to 12,588 from 12,671 students.
UFB has blamed DUC for the reduction of student capitation in large universities, prompting the introduction of a new formula.
The government will replace DUC with a new formula in July next year that is expected to give more money to universities and colleges whose graduates get jobs within a year of completing their studies.
UFB — which guides the allocation of State funds to public universities — said the new formula is borrowed from global best practices.