Top university adopts austerity measures to stem decline

The University of Nairobi, Kenya’s oldest and most decorated public university, has announced several austerity measures to manage a biting financial crunch and tame a huge deficit that promises to bring down the university. This has been made worse by rapidly declining student numbers, especially in respect of its former cash-cow: the self-sponsored student programme.

Whichever way you look at it, the university is facing one of the most trying moments in its history as it battles to regain its foothold in Kenya’s lucrative and increasingly competitive higher education sector, amid fast-rising rivals.

On 13 August, Vice-Chancellor Professor Peter Mbithi set out a number of initiatives which are meant to cut operational costs and drive up revenues. They include a freeze on the hiring of lecturers and other staff; no replacement of people who retire; and a substantial cut to the number of staff working beyond the retirement age of 70 (only those who are involved in research, supervision of postgraduate students and able to bring in research grants will be retained); and laying off contract workers.

In addition, the measures also see the university utilise only part-time lecturers for its Kisumu and Mombasa campuses.

Power struggles

Since he was appointed in December 2014 Mbithi has been at loggerheads with his deputy Professor Bernard Njoroge over the control of finances and the institution in general. Njoroge had reportedly raised concerns over mismanagement of university finances.

In August, the row deepened after Mbithi issued new financial control guidelines requiring that all expenditures above US$1,000 be approved by the vice-chancellor. Njoroge protested the directive, saying it was meant to “clip his powers”. The vice-chancellor also announced changes that would see performance management run out of his office – a departure from the past when the function was a preserve of the deputy vice-chancellor for academic affairs, Mbithi’s previous role.

In an internal notice made public this week, Mbithi asked departments to identify staff who were no longer required. “Stop all overtime payments, only permit in exceptional cases with justification and on a case-by-case basis for each occurrence. Rationalise staff work load across the board for maximum efficiency and ensure non-replacement of retired staff,” he said in the circular.

In other measures, the university will significantly reduce expenses on staff tea and snacks as well as other operational activities like photocopying. Staff will be expected to increase usage of email to reduce paperwork, limit meeting times and print on both sides of paper.

In April, the vice-chancellor said the institution would not renew contracts for staff hired on temporary terms. “Module II programme or self-sponsored students have reduced at the university to almost half. There have been requests from the departments to reduce staff that have been working under this programme and we are looking at them,” he said.

Shortfall

The university said it received US$3.9 million from the Treasury to pay its 4,945 workers against a need for US$8.9 million, leaving a deficit of US$5 million.

Since the government cut the university entry grade to C+ for state-funded students two years ago, universities have seen a decline in numbers under the parallel (self-sponsored) programme which is the biggest revenue generator for the public institutions besides the government subsidies. Initially, the cut-off was a B+.

Statistics show that slightly fewer than 70,000 students qualified to join universities this year after attaining the requisite grades in the 2017 secondary examinations. Previously, at least half of these students would join universities under the self-sponsored programmes, while an equal number would enrol for regular courses.

The number of those joining public universities is at least 18,000 lower than in 2017. For the University of Nairobi, the data indicate there has been a major decline in student numbers to 67,827 this year from 98,715 in 2015. Last year, the university had 72,700 students.

Hopes for improved quality

Stakeholders hope the silver lining will be a higher quality of tuition and graduates.

“Falling student numbers offer a silver lining to public universities as the lower enrolment boosts the lecturer:student ratio and eases pressure on teaching facilities. This has the potential of helping to curb the release of half-baked graduates that employers have been complaining about in recent years.

"We must bring to an end the quest for populating lecture halls for the sake of it. University leadership must think hard on diversifying revenue sources beyond fees and the Treasury allocations to include endowment funds,” said an editorial on 13 August in Business Daily, Kenya’s premier business newspaper.

The past financial year saw the university operating at a deficit of over approximately US$16 million. A 2016 report by the Commission for University Education showed that the public universities are operating with at least US$100 million in budget deficits arising from poor financial management. In a February 2017 assessment of public universities, the country’s auditor general listed 11 of the country’s institutions, including Nairobi, as being insolvent.

Additionally, the university was cited as one of the institutions which is spending more than 80% of its budget on recurrent expenditure – largely salaries and wages – at the expense of capital projects, research and innovation.

According to the auditor general’s report, the university has also fallen behind in paying statutory dues to the Kenya Revenue Authority, Pensions Scheme, National Hospital Insurance Fund, National Social Security Fund, Higher Education Loans Board and University of Nairobi Co-operative.