Cash crunch: Universities struggle to stay afloat
Universities Academic Staff Union Secretary-General Constantine Wasonga. file photo | nmg
What you need to know:
- With the decline in the number of self-sponsored students and the introduction of funding of universities based on courses offered since last year, most of the institutions are struggling to remain afloat.
- Universities are also struggling with debts running into billions of shillings as some had borrowed the funds for expansion, but are now unable repay them.
- Private universities have not been spared either as they have turned to certificate courses in order to remain relevant.
The financial crisis facing public institutions of higher learning across the country was on Thursday laid bare by university staff during a meeting with the Senate Education Committee.
With the decline in the number of self-sponsored students and the introduction of funding of universities based on courses offered since last year, most of the institutions are struggling to remain afloat.
Moi University last year had indicated that it will put up a 36-storey building near Laico Regency hotel to host its Nairobi campus, but the plan has since been shelved due to lack of funds.
The university currently pays Sh27 million per semester for its college at the Bazaar building.
Presbyterian University of East Africa has also put on sale 34 acres of land in Kikuyu at Sh40 million to solve its financial crisis.
Kenya Methodist University and Catholic University of Eastern Africa are among private universities struggling to pay their debts which stand at Sh3 billion and Sh1.5 billion respectively.
According to the Universities Academic Staff Union Secretary-General Constantine Wasonga, the government has not been able to provide adequate funds through capitation to enable the universities to respond to the high demands.
“Consequently, university managers have been forced to secure and offer many of their services on credit. Almost all the public universities owe their suppliers and service providers,” said Dr Wasonga.
He told the committee if the government stricter rules on admission, a number of universities will be closed down as most of them are insolvent.
Universities are also struggling with debts running into billions of shillings as some had borrowed the funds for expansion, but are now unable repay them.
Private universities have not been spared either as they have turned to certificate courses in order to remain relevant.
Dr Wasonga said Egerton University, Moi University, Jomo Kenyatta University of Agriculture and Technology (JKUAT) and Technical University of Kenya (TUK) are some of the institutions that are struggling financially.
He told the committee, chaired by Mr Christopher Langat (Bomet), that Moi University had made statutory and loan deductions of Sh598 million from staff, but failed to submit these to relevant agencies.
Dr Wasonga further said Sh117 million for provident fund had been deducted but not submitted to relevant agency. He also cited Egerton University, saying it had collected Sh122 million from staff as Sacco savings, which was not submitted.
He also said JKUAT was deducting statutory payments but not submitting the money to agencies, without disclosing how much it was.
“Universities are currently struggling to pay net salaries. We are a sad lot as lecturers are being turned away from health facilities and being blacklisted by financial institutions for failing to meet their obligations,” Dr Wasonga told the committee.
Nyamira Senator Okong’o Mogeni said action should be taken against universities that make deductions without submitting. “We should take this issue seriously as it’s a criminal offence,” said Mr Omogeni.
Last month, the National Hospital Insurance Fund (NHIF) stopped workers TUK from accessing treatment in hospitals after the institution failed to submit more than Sh55 million in deductions and penalties.
NHIF Chief Executive Officer Geoffrey Mwangi said the institution had not paid its premiums since April 2017.
Vice-chancellors Francis Aduol (TUK), Mabel Imbuga (JKUAT), Rose Mwonya (Egerton) and Laban Ayiro (Moi) did not respond to queries from Sunday Nation on the issues that had been raised before the Senate.
