Kenya varsity funding is wasteful, warns World Bank

Annual budget allocation to Kenyan universities should be set on performance targets and not wasteful historical trends, the World Bank has recommended.

What you need to know:

  • Study shows current financing model does not give value for money
  • In the 2019/20 fiscal budget , the National Treasury allocated Sh97.7 billion to public universities.
  • The bank urges Kenya to scrap the parallel fee system as a first step towards financial sustainability in her struggling public higher education institutions.

Annual budget allocation to Kenyan universities should be set on performance targets and not wasteful historical trends, the World Bank has recommended.

It said an adequate model for allocating public funds for higher education in Kenya would focus on key principles including; close alignment with national priorities, explicit link to performance, equity among all population groups, objectivity and transparency in the allocation process and criteria.

Others are consistency and compatibility among the various financing instruments in use, stability over time, institutional autonomy and accountability, and allocation as a block grant.

“With these principles in mind, the Government of Kenya could introduce a combination of performance-based budget allocation mechanisms that would provide financial incentives for improved institutional results and better alignment with national policy goals” the Bank said in an analytic report.

In the 2019/20 fiscal budget , the National Treasury allocated Sh97.7 billion to public universities.

Sector estimates further show that the government has funded university education at a fixed rate of Sh70,000 per student per academic year, notwithstanding of programme of study, for the last 26 years.

Performance contracts are nonbinding regulatory agreements, negotiated between governments and tertiary education institutions, defining a set of mutual obligations.

In return for the participating universities’ commitment to meeting the performance targets established in the agreement, the government provides additional funding.

The agreements may be with several or all institutions in a given tertiary education system or with a single institution.

All or a portion of the funding may be conditional upon the participating institutions meeting the requirements in the contracts.

The agreements can be prospectively funded or reviewed and acted upon retrospectively.

“Competitive funds have proven their value and strength as an effective resource allocation mechanism for transformative investment purposes. Under this approach, universities are invited to formulate project proposals that are reviewed and selected by committees of peers according to transparent procedures and criteria” the World Bank said.

“The Government of Kenya could consider piloting a competitive fund as a channel for allocating public investment funds to support attempts to improve the performance and quality of higher education institutions, emulating the strategy adopted by the World Bank to select the African Centers of Excellence,” it further said.

Parallel fee system

The bank also urged Kenya to scrap the parallel fee system as a first step towards financial sustainability in her struggling public higher education institutions.

The bank’s researchers are instead rooting for a two-pronged approach where subsidised tuition fees will be targeted at students from poor background, while those from wealthy households will pay full fees for higher education.

This is opposed to the present system where qualification for loans and fee subsidies is based on academic qualification, an approach the researchers argue has widened the disparity in university enrollments between students from low- and high-income households.

Findings of the latest Kenya Integrated Household Budget Survey (KIHBS) showed 9.8 percent of the highest income households had a member enrolled in university compared with a paltry 0.2 percent for poorest homes.

“The disparity ratio is 49, meaning that a young Kenyan from the richest income group is 49 times more likely to access higher education than one from the lowest income group,” the report states making reference to the household expenditures survey for the period through June 2016.

“This is because poor students tend to progress less well through primary and secondary education than those coming from the richest income groups with the highest cultural capital, and they are less well prepared academically when they take the KCSE (Kenya Certificate of Secondary Education).”

Quality in enrolment

The shift to Targeted Free Tuition (TFT) scheme where only fees for students from low-income homes will be subsidised, the researchers say, will improve equity in enrollment in higher education institutions, especially universities.

Such approach has been adopted by South Africa and Chile.

“This would require shifting from a system of fee exemptions that benefit the most qualified students from an academic viewpoint—often from wealthier families—to a system where the neediest students who qualify for higher education studies would not pay tuition fees,” the bank says in a policy report published August 21.

The policies used by the Higher Education Loans Board (HELB) should, however, also be realigned to the proposed tuition fee approach for it to be successful, the policy report adds.

“Priority should be given to extending bursaries and loans to needy students and providing loans to middle-class students. Strengthening HELB would require actions on …better targeting, resource mobilisation and improved loan recovery, preferably through an income-contingent approach,” the researchers argue.

“In addition, Kenyan universities could actively seek additional resources through donations, contract research, consultancies, continuing education, and other fund-raising activities, as some of them have already done since the government started reducing university budgets in the mid-1990s.”

The universities are presently staring at a cash crisis system as a result of a slowdown in enrollment on the back of rapid growth in universities and university colleges at the beginning of the decade, a situation which has potentially compromised quality of training.

More than double

Between 2009 and 2014, for instance, the number more than doubled to 68 from 31, boosting enrollment to 7.5 percent from 4.0 percent over the period, but straining resources at universities.

“Sometimes, the creation of new public universities has responded more to political considerations than actual demand for the programmes that they offer.

"Indeed, the fast enrollment growth has created a tension between the social demand for further expansion and the need to improve quality and relevance through appropriate programs and effective learning models,” the report say.

Vice-chancellors (VCs), technically the chief executives of universities, have unsuccessfully been agitating for fee increment since around 2014 to keep up with rising demand for resources amid constrained government financing.

University student leaderships across the country have, nonetheless, been united in resisting such plans. In May 2014, for instance, students in public universities successfully staged a strike against a proposal to hike tuition fees.

Subsequent threats for strike by university students’ leadership have since been reported in November 2017, September 2018 and February this year with VCs adamant it was necessary to improve quality of training.

“While there has been no systematic evaluation of quality standards in Kenyan universities in recent years, it appears that rapid enrollment growth in the universities has come at the expense of quality,” the World Bank researchers say.

The report says while students in university have risen five-fold (five times) between 2011 and 2018, teaching staff has expanded by about 13 percent, raising student-teacher ratios to 70:1 in several public universities.

Industrial action

The situation has been exacerbated by industrial actions which reduces time for student learning.

“Even though the government has accelerated the production of postgraduate degree holders who are candidates for recruitment as university faculty members, many Kenyan universities do not have sufficient numbers of qualified staff, which undermines the quality of the training offered,” the report states.

“In addition, pedagogical practices (teaching theories and methods) continue to be very traditional in many higher education institutions, with overreliance on rote learning and outdated curricula that tend to be excessively theoretical.”

In 2016, the Ministry of Education stopped public universities from setting up more satellite campuses amid reports of increased focus on growing revenues at the expense of academic excellence.

Employers have often complained of half-baked graduates, claims which were corroborated by findings of a quality report by the Commission for University Education (CUE) that the campuses lack sufficient physical and teaching facilities.

“While having an educated populace is a good indicator for the country, this has also posed a number of challenges such as having many graduates who are not adequately prepared for the market or whose qualifications do not match market demands,” CUE, the varsity regulator, wrote in a report published in August 2016.

The Federation of Kenya Employers (FKE) said a survey on members in December 2017 showed up to 70 percent of entry-level recruits need a refresher course to understand and deliver at the workplace, piling up cost of doing business.

“The university training focuses more on academic qualifications as opposed to imparting specific skills and competencies on the learners,” FKE Executive Director Jacqueline Mugo said in a past interview.

“This not only increases the costs of doing business, but also reduces productivity of the industries as new workers take long to become productive.”

The government had earlier in 2013 also stopped conversion of technical training institutions into university campuses in a bid to create a balance between university-level skills and mid-level technical knowledge.

Supporting growth

A year later in June 2014, Kenya created a full-fledged Technical and Vocational Education and Training (TVET) department in the Education ministry to develop policy for supporting growth of technicians to support the country’s industrialisation ambitions.

World Bank researchers say TVETs do not have adequate infrastructure and equipment to support the teaching of the national competency-based curriculum, with many instructors having not received appropriate training to teach technical skills.

“The programme of these institutions is not fully aligned with the competency-based curriculum, and the links with industry are quite weak,” the report says.

“In addition, these institutions are dispersed across several ministries, resulting in limited homogeneity in programmes and standards.

“For these reasons, parents and students perceive TVET programmes as second-rate options for students with lower academic abilities and aspirations.”

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