Economy

Varsities face deeper cash crisis on Sh4bn budget cut

UON

The Fountain of Knowledge at University of Nairobi. FILE PHOTO | NMG

lynetigadwah_img

Summary

  • Public universities have been dealt a major blow after the Treasury slashed their approved budget by Sh4 billion, piling pressure on the institutions already facing dire financial challenges.
  • The Sh113 billion allocated University Education in the current financial year was already a Sh10 billion slash from the Sh123.6 billion the previous year on expected lower revenue due to Covid-19 pandemic.
  • Universities funding has been hit hard by the sharp decline of self-sponsored students over the past three years that generated billions of shillings for the institutions.

Public universities have been dealt a major blow after the Treasury slashed their approved budget by Sh4 billion, piling pressure on the institutions already facing dire financial challenges.

They have been allocated Sh109 billion for the 2021/2022 fiscal year, down from Sh113billion in the current financial year. This is so despite a Sh20 billion request by the institutions of higher learning made in October to keep them afloat amid a drop in the number of self-sponsored students.

“The reduction is on account of budget rationalisation,” the Treasury said in its supplementary budget estimates documents tabled in Parliament.

The Sh113 billion allocated University Education in the current financial year was already a Sh10 billion slash from the Sh123.6 billion the previous year on expected lower revenue due to Covid-19 pandemic.

Universities' funding has been hit hard by the sharp decline of self-sponsored students over the past three years that generated billions of shillings for the institutions.

This has put pressure on the universities to seek additional funding with the review of tuition fees taking centre stage.

The institutions have also had to freeze hiring and slow down expansion as they struggle with huge debts.

Data from the Ministry of Education shows universities have failed to remit employee dues amounting to Sh34 billion.

The public universities have outstanding remittances to the Kenya Revenue Authority, National Hospital Insurance Fund (NHIF), National Social Securities Fund (NSSF), pension schemes, insurance premiums and sacco contributions.

Higher Educaton principal secretary Simon Nabukwesi recently told Parliament that Moi University, the University of Nairobi (UoN), Egerton University and the Technical University of Kenya (Tuk) carry the biggest bill.

A report tabled in Parliament on the 2020/21 Budget shows that UoN tops the list with Sh5.5 billion in unpaid statutory dues while Jomo Kenyatta University of Agriculture Technology (JKUAT) and the Tuk come in second at Sh3.5 billion each, while Kenyatta University has not remitted Sh2.7 billion.