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Public Universities Struggling With Ksh56 Billion Debt

UON
[PHOTO/ COURTESY]

Kenyan public universities are struggling to stay afloat even as their cumulative debts reach an all-time high of Ksh56.6 billion.

According to a report by the  Universities Funding Board (UFB), the debt is mostly comprised of unremitted statutory deductions which have accumulated penalties.

The most affected firms include Kenya Revenue Authority, the National Hospital Insurance Fund, the National Social Security Fund, pension schemes, insurance companies, and saccos.

The University of Nairobi is the most affected, with Ksh7.2 billion owed to KRA and Ksh4 billion in staff pension arrears.

“The universities should consider and effect public-private partnerships in the provision of some services in all universities, especially those central to the core mandate of the university,” said UFB chief executive Geoffrey Monari.

Read: Ksh1.3 Billion Debt Threatens To Sink Academic Giant KU

In a recent report, auditor general Nancy Gathungu revealed that Kenyatta University was operating on the red following a Ksh1.3 billion debt.

In her revelations, Gathungu says that the university is relying on short-term loans to stay afloat, which are extremely costly.

“The university is therefore, technically insolvent and if no urgent positive measures are taken to improve the financial position, it may not be able to meet its mandate in future,” said Ms Gathungu.

In the year to June 2019, KU’s deficit stood at Ksh677 million, reducing accumulated surplus from Ksh5.84 billion in 2019 to Ksh4.5 billion.
Also, the University’s liabilities stood at Ksh6.38 billion as of June 2020, putting it on the red against an asset base of Ksh1.58 billion.
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Written by Francis Muli

Follow me on Twitter @francismuli_. Email francis@kahawatungu.com

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