Universities are facing a financial crisis after the government declined requests for more funds as the institutions struggle to settle a Ksh. 18 billion debt in statutory deductions.
At a meeting with Education Cabinet Secretary George Magoha on Monday, public university councils were directed to settle Ksh 9 billion debt for the pension of 27,000 staff and Ksh 9 billion PAYE owed to Kenya Revenue Authority (KRA).
They were asked to ensure that the management deducts funds from staff and submits to KRA, NSSF, NHIF and pension schemes.
The KRA has blacklisted some employees of universities for not submitting taxes. Affected staff cannot get compliance certificates to enable them apply for various jobs in the public service.
Already, the Retirement Benefits Authority (RBA) has warned that six public universities risk losing assets such as land and homes to pension schemes after they failed to remit deductions estimated at Sh5 billion.
Prof Magoha has since directed the councils to immediately put in place plans to sack some of their staff, following a decline in the number of students, in order to cut costs.
University councils will also go after non-core staff with professors being spared the sack.
Some departments and universities will be merged. The process will be done in collaboration with the Commission for University Education (CUE).
Public universities’ cash flow has been hit hard following a lower student intake which adversely affected the lucrative parallel degree courses in which students pay fees based at market rates.
This has prompted many universities to delay statutory deductions such as pension, which will see thousands of retirees take home smaller packages as they miss out on investment incomes.
The number of both public and private universities now stands at 74. “If possible, existing universities and campuses can be consolidated for maximum utilisation,” said Prof Magoha when he opened a two-day conference on higher education in Nairobi.
At the same time he has directed government sponsored students not to pay extra fees to the institutions.
Prof Magoha, during a meeting with managers of private universities, said if they are not happy with the current arrangement they should surrender the more than 40,000 students to other universities.
Private universities have been seeking more than Sh5.6 billion from the government saying the Sh2 billion that they are currently allocated is not enough.
Already, private universities have sought the intervention of the National Assembly in order to get more funds. However, Prof Magoha said the ministry will not seek more funds from the Treasury for the institutions.
Kenya Association of Private Universities (Kapu) chairman Mumo Kisau said funds allocated to the institutions are not enough to cater for students’ needs.
Prof Kisau said that allocation to private universities had been reduced by Sh20 million from Sh2bn despite the fact that the number of students had increased.
By Ouma Wanzala