Kenya’s public universities turn to World Bank Group for bailout

NAIROBI, Kenya - The Public universities in Kenya are seeking a cute cash crisis that might see most of them collapsing. They have now turned to the World Bank Group for a cash bailout of KSH 2.4 billion.

According to Universities Fund (UF), they have submitted a request for a grant to the World Bank Group for assistance with the funding shortfall facing a number of them.

“Yes, it's absolutely true that we have made a request for a KSH 2.4 billion grant to the World Bank as part of our alternative resource mobilization activities. This grant will enable most of these universities to supplement government funding.” reveals, Geoffrey Monari. UF, CEO.

Over the last few years, most of Kenya’s public university institutions have been struggling to meet obligations such as payroll taxes, retirement benefits, and insurance premiums for employees.

Mr. Monari states that the decline in part-time or parallel student enrollment has contributed heavily to the cash crunch. The part-time segment of students generated billions of shillings for the institutions.

Allocations from the State have been on a downward trajectory in recent years, which has slashed student capitation, worsening the financial woes of public universities.

This year alone most of the public universities will require KSH 33 billion for the admission of new students but at the moment the National Treasury has been able to allocate only KSH 13 billion.

Government funding to universities is based on the differentiated unit cost (DUC) model under which institutions get allocations based on the number of undergraduate students registered on the regular program and the kinds of courses they take.

Meaning the government only caters to 80 percent of the unit cost while the remaining 20 percent is borne by students and institutions.

This means that at 80 percent sponsorship, the state pays KSH 720,000 for a clinical medicine degree compared to KSH 240,000 for the social sciences.

However, the funding ratio has been dropping steadily in the past five years to the current 48.1 percent of the unit cost on stagnant government funding.

Between 2019-2022 the number of government-sponsored students has increased by 122,970 to 356,188, while the approved budget in the review period increased at a slower rate from KSH 6 billion to KSH 44 billion.

The situation is worse in private universities as they have a total of 78,650 government-sponsored students with a DUC requirement of KSH 12.3 billion against a budget allocation of KSH 3.4 billion (21 percent of the DUC).

Mr. Monari opines that “Overall, the budget required to cater for the State-sponsored students at 80 percent of the unit cost in the current financial year is KSH 87.3 billion against the KSH 47.4 billion allocated, resulting in a budget deficit of KSH 40 billion. This is why resource mobilization is an important mandate of the Fund as it will assist ease the pressure on the government to fund universities.”

Monari further revealed that apart from the World Bank, the agency had engaged various donors and partners who are willing to support sector-specific programs such as mining, agribusiness, and climate change.

Under its Strategic Plan for 2021-2026, the UF has stated it will source funds through proposal writing to development partners, including multilateral, bilateral agencies and international financial institutions (IFIs).

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.

GAROWE ONLINE