University reels from US$5.8m loss as campuses shut

Kenya’s Kenyatta University is reeling from the loss of its US$5.8 million investment in satellite campuses in Rwanda and Tanzania, after their respective governments shut the campuses down recently over claims that they had not complied with new regulations.

A report by the Kenyan government released on 14 October reveals that the university lost the more than US$5.8 million that it had spent on campuses in Kigali in Rwanda and Arusha in Tanzania. A sum of US$4.8 million had been pumped into the Kigali operation, while the balance of US$1 million had gone to Tanzania.

The Kenyan government had told the governments of Rwanda and Tanzania that Kenyatta University (KU) had complied with the regulations of both countries when it set up the campuses, after the government, in 2016, requested that the university follow correct procedures. The authorities in both countries, however, denied clearance to the satellite campuses after amending legislation.

In September, the Tanzanian government stopped students from being admitted to KU’s satellite campus on the grounds that its standards were flawed.

High risks

Kenya’s Auditor General Edward Ouko said in parliament recently that Rwanda and Tanzania had closed both campuses and that KU – Kenya’s largest public university by student numbers – had no hope of recovering the funds from the two countries, which highlighted the high risks involved in KU’s programme of external expansion.

In 2016, Kenya’s parliament found KU in default of regulations for establishing satellite campuses after the Tanzania Commission for Universities said KU had not met the required standards. Although KU worked to address the situation, in July, then Kenyan education cabinet secretary Fred Matiang’i – at the behest of the Tanzanian government – told KU to shut its Tanzanian campus.

The decision also affected KU’s satellite campus in Kigali and other campuses in Kigali and Arusha run by Jomo Kenyatta University of Agriculture and Technology (JKUAT).

JKUAT had begun enrolling students there in 2012 but suspended teaching in March 2017 after the university commission ordered it to seek more appropriate premises. This affected about 3,000 university students who were pursuing both postgraduate and undergraduate studies.

Kenyatta University had not yet begun its operation in Kigali and the closures have presented a major setback to its expansion strategy, with the Kigali and Arusha campuses central to its five-year expansion plan. The university may now sell its building in Kigali.

In 2015, the Rwandan government also stopped Mount Kenya University (MKU) – Kenya’s largest private university by student numbers – from offering five medical courses in the country, saying that MKU had not met its requirements. The university has since regularised its operations in Rwanda and its Kigali campus was opened in 2010. It offers courses in health education and executive MBA programmes to more than 4,000 students.

Growth spree

Locally, KU has been on a growth spree, with the university engaging private investors to pump US$11 million into new academic and residential facilities. The investors are required to build and operate these facilities for between eight and 12 years before transferring ownership to the institution. During this period, they are expected to recoup their investment.

Kenyatta University Council Chairman Shem E Migot-Adholla told University World News from Nairobi that the closure of the two campuses would support the university’s new strategy of consolidating resources to sustain Kenyan campuses.

“We are facing enormous challenges brought about by financial constraints following the enrolment of low student numbers, triggering reduced revenues. We are rationalising income-generating activities, introducing new diploma programmes, refocusing on research markets to improve credibility and revitalising our digital learning programme to attract more students,” he said.

Meanwhile, it was reported by local newspaper Daily Nation last week that parliament had asked the national treasury to allocate KES1.6 billion (US$15.8 million) to Kenyatta University Hospital to trigger the release of an undisbursed loan owed to the Chinese government to operationalise the training facility.

The House says KES656,682,201 is needed for the dry run budget and KES1,060,490,567 for the soft run of Kenyatta University Teaching and Referral Hospital considering that the facility has been lying idle and the university is currently facing financial constraints.