New funding model to revive struggling Universities- Education CS says

The government is relying on a new funding model for higher education to help revive institutions that are facing financial difficulties due to increasing unpaid debts.

Education Cabinet Secretary Julius Ogamba reported that 23 out of 35 public universities are effectively insolvent, raising alarms among students and other stakeholders. These universities have collectively amassed Sh75 billion in unpaid bills owed to various statutory entities.

For example, the University of Nairobi (UoN) has outstanding debts totaling Sh13 billion, accumulated over the past 12 years. This debt includes Sh4 billion owed to the Kenya Revenue Authority (KRA), Sh7.7 billion in pension contributions, and Sh25.6 million each for the Housing Levy and the National Social Security Fund.

Moreover, UoN owes Chuna Sacco Sh20.8 million, Sh4.5 million to insurance companies, and Sh351.8 million in bank loans.

The Technical University of Kenya (TUK) is also in financial distress, with liabilities reaching Sh12.9 billion, indicating that the debts of these two universities alone exceed their total assets.

Despite this dire situation, President William Ruto has presented an optimistic view of higher education. While granting a charter to Rara University at State House, he mentioned that the phased-out funding model has aided some universities in regaining financial stability.

“I am happy to report that both Moi University and the Technical University of Kenya are now on the road to financial recovery,” President Ruto stated.

During the Huawei ICT competition award ceremony, Education CS Ogamba clarified that there is no inconsistency in the government’s message. He emphasized that without prompt action, many universities would face insolvency.

“There is no contradiction at all on this matter. What we informed Parliament last week is accurate: the Auditor General has determined that 23 of our public universities are technically insolvent. This is exactly why the new funding model for higher education was introduced—to help alleviate these financial issues,” he explained.

Interestingly, Ogamba has now aligned his comments with those of the President, despite their seemingly conflicting statements from the previous week.

“Our universities are now on a growth path following the introduction of the new funding model,” he said.

To further assist the recovery of higher education institutions, President Ruto announced the establishment of a new State Department for Science, Research, and Innovation under the Ministry of Education. This initiative is expected to enable universities to create technology-driven solutions for long-term sustainability.