Universities face tough times as budget hopes dashed

The vice-chancellor of the University of Nairobi has asked the government to review the budgetary allocation to his university after the treasury failed to meet public universities’ requisitions for the forthcoming fiscal year. The total allocation to all public universities, which is US$200 million less than the amount requested, has dashed the hopes of several institutions facing a crippling cash crunch.

The government has allocated US$982 million to her public universities for the 2017-18 financial year in the budget to be unveiled in parliament on 30 March. University administrators say the allocation is over US$200 million lower than the amount they had requested for the period. At US$721 million, however, the amount is 36% higher than the allocation in the current financial year. The research and innovation kitty for public universities has been set at US$42 million, up from US$37 million – a 13% increase.

However, the lower-than-expected allocation means the universities themselves will have to effect budget cuts at a time when they are facing a series of challenges. Public universities agreed last week to increase salaries for lecturers by 17.5% after a 54-day strike that paralysed the sector. The agreed increase means universities will have to seek more funds to finance the increment.

Professor Peter Mbithi has asked parliament to reconsider a budget cut of US$17 million slapped on the University of Nairobi. “We acknowledge that we have been facing financial challenges like any other public entity due to declining budgetary support. We have asked parliament to review the allocation,” Mbithi told reporters two weeks ago.

New funding model

Defending the budget cuts to universities, treasury said they were based on the new financing model known as the differentiated unit cost model, in terms of which state funds are allocated on the basis of the courses being taught at specific universities.

Under the new policy, subsidies for science courses are relatively higher than those for arts. Data shows that about 80% of students are enrolled in the humanities and social sciences. The same trend can be seen in the teaching discipline, where the number of tutors taking science-related courses is growing at a slower rate than in the arts. The new differentiated unit cost model is intended to provide enhanced loans to learners based on the actual cost of a programme.

The impact of the new model on the financial health of the sector remains to be seen.

An October 2016 audit by the sector regulator – the Commission for University Education – revealed that the institutions are operating on a US$100 million budget gap, effectively hurting efforts to increase student intake and improve the quality of learning. In a February assessment of public universities, the auditor general listed 11 of the country’s institutions as being insolvent. The University of Nairobi, the second biggest institution by student numbers, was on the list and it has warned that the decision to cut allocations will significantly affect service delivery.

Kenya’s higher education institutions spend more than 80% of their budgets on recurrent expenditure – largely salaries and wages – at the expense of capital projects, research and innovation, a trend that is frustrating the focus on improving the quality of education.

The Higher Education Loans Board, the agency that disburses loans to students on behalf of the government, has also been hit by the cost-cutting measures. While the agency had requested a total of US$190 million from the national treasury for the year beginning July 2017, it has been allocated a US$100 million budget, slightly higher than the US$91 million it received in the current financial year.

Public universities rely heavily on state funding. Failure to increase funding in line with rising enrolments has undermined expansion plans, including the construction of new campuses, at a time when classes are overflowing.

Proposed fee increases

Educationists and university administrators have said they might be forced to increase fees for the institutions to remain afloat. Last year, universities proposed to increase fees by US$79 per annum, a move which could see the fees increase from US$160 to US$240.

The financial crunch in Kenyan universities comes at a time when the institutions are facing a damaging credibility crisis over faltering governance and falling quality. A recent audit by the Commission for University Education exposed massive rot in the institutions, exposing problems with both quality and credibility.

The most recent scandal came last week, when new reports emerged of fake degree certificates circulating in the job market and linked to Inoorero University that was deregistered in 2014 after being declared insolvent as a result of low student numbers.

But even as the universities continue to struggle under the weight of budgetary constraints, statistics are pointing to a fast-growing sector. The number of universities both public and private increased from 65 in 2013-14 to 70 this year, with a combined total enrolment of 490,750 students in the current year.

According to the latest education sector report, public university enrolment has increased from 56,986 in 2013 to 74,046 in 2016, with increasing numbers of female students as well as increased access for students with disabilities.

Kenya has kicked off a series of reforms that will, among other things, set a higher qualifications threshold for the appointment of lecturers. In a directive to be implemented in the next five years, only PhD holders will be allowed to teach at universities.