Graft clampdown – Universities told to halt new projects

Kenya’s public universities, many of which have embarked on ambitious infrastructure projects, are facing a rocky future following the government’s blanket ban on new infrastructure projects for all state agencies and the implementation of tighter procurement processes – all aimed at clamping down on corruption.

On 20 July, the country’s president, Uhuru Kenyatta, issued a directive freezing all new government projects until current projects are completed. This is expected to help the country stem wanton wastage of public resources and a growing list of abandoned government projects.

Public universities have been singled out as some of the institutions harbouring white elephant projects and pursuing parallel infrastructure projects as they seek extra capacity to meet the growing demand for higher education.

Treasury approval

All accounting officers in universities will now be held responsible if they sanction new projects without express authority from the National Treasury. Previously, these officers were not required to seek explicit approval from Treasury on such developments as universities are largely run as autonomous institutions.

A spot check by University World News showed that a majority of the big universities have several incomplete projects and have at the same time engaged contractors for new ones. As such, they will be affected by this directive as they may have to halt negotiations and plans with investors and contractors.

In order to avoid reprisals, the institutions will now have to source funds to complete all running projects, especially those that have stalled.

Increased procurement scrutiny

Under the new operational regime, the government has also increased the scrutiny of procurement procedures in all public institutions.

Universities, like the rest of the state agencies will be expected to advertise all procurements, tenders and contracts on a new government portal to create transparency in order to safeguard public resources from theft. They will also be expected to provide regular updates on all running projects. “All procurement officers have been taken through the operations of the portal and they have given their feedback. The portal will be launched soon,” the president said.

It is hoped that the publication of contracts on a public platform will allow the citizenry to scrutinise projects and report any irregularities.

Fight against graft

The government’s directives are the latest in a slate of initiatives by the government to fight graft. In June, Kenyatta ordered all heads of procurement and accounting units in ministries, departments and state corporations – which includes public universities – to step aside immediately and allow their deputies to take over. However, this order is on hold following a court injunction against it.

It was not immediately clear if the directive on new projects will also affect existing public-private partnership (PPP) deals which are expected to help universities expand their capacity by tapping private funding. Moi University, University of Embu and South Eastern Kenya University, for example, are seeking bidders to expand student hostels by more than 24,000 beds through the PPP model.

Annual losses

It is estimated that at least a third of funds provided in Kenya’s annual financial budget is stolen or lost through shady procurement procedures or is largely unaccounted for. This means that the country loses up to US$5 billion in such, based on the country’s average annual budget of US$15 billion.

The country is currently smarting from a wave of graft scandals which have hit government departments, among them the National Youth Service, a government-backed youth employment programme; the Kenya Power Limited, a monopoly state electricity distributor; and the Kenya Pipeline Company, a government agency that distributes petroleum products.

Over US$500 million is said to have been lost in dodgy dealings within the three institutions and dozens of senior government officials and private entrepreneurs are facing charges.

For public universities, mismanagement of resources has been a big concern with reported loss of project funds and growing cases of dubious budget management processes.

A 2016 report by the Commission for University Education showed that public universities are operating with at least US$100 million in budget deficits arising from poor financial management practices. In a February 2017 assessment of public universities, the country’s auditor general listed 11 of the country’s institutions, including the University of Nairobi, as being insolvent.

Additionally, universities are spending more than 80% of their budgets on recurrent expenditure – largely salaries and wages – at the expense of capital projects, research and innovation.

From next year, Kenya’s universities will be expected to publish regular financial performance reports.